- US Bancorp is running a stablecoin pilot on the Stellar blockchain with support from PwC and the Stellar Development Foundation.
- The project focuses on programmable money in a highly regulated environment, highlighting features such as transaction reversals and asset freezes.
- Stellar’s growing institutional adoption and technical upgrades contrast with the recent underperformance of its native token XLM.
- US Bank is also researching tokenized assets and 24/7 settlement, aiming to extend blockchain use cases beyond payments.
US Bancorp has started a pilot project to issue a stablecoin on the Stellar blockchain, signaling how large American banks are moving from theory to concrete experiments with digital money. The initiative places one of the biggest commercial banks in the United States at the center of the push to test blockchain in a tightly regulated setting.
Backed by consulting firm PricewaterhouseCoopers (PwC) and the Stellar Development Foundation (SDF), the program aims to explore how programmable, on-chain money could work at bank scale. Rather than a flashy marketing move, the pilot is being framed as a controlled test bed to assess whether blockchain is ready for everyday banking operations and customer use.
US Bancorp’s stablecoin pilot and partners
US Bancorp, the publicly traded parent of US Bank, oversees more than $664 billion in assets and generates over $27.5 billion in annual revenue, according to the bank’s own figures. Its decision to run a stablecoin pilot on Stellar adds institutional weight to an ecosystem long focused on cross-border payments and asset tokenization.
The pilot is being run in collaboration with PwC, which is providing blockchain strategy and risk guidance, and the Stellar Development Foundation, the non-profit that supports the Stellar network’s growth. SDF described the initiative as part of a broader shift in financial infrastructure, arguing that major institutions are now actively shaping the next generation of digital banking.
In a recent statement, the Stellar Development Foundation said that traditional institutions are no longer just exploring blockchain in theory. Instead, they are helping design and test systems that could underpin future payment rails and digital assets in a more regulated environment than typical crypto projects.
The pilot is being discussed publicly through industry channels, including an episode of US Bank’s “Money 20/20” podcast, where executives and partners outlined how the project is structured and why Stellar was chosen over other networks.
Why US Bank chose Stellar for its stablecoin test
Stellar launched in 2014 as an open-source, decentralized blockchain built for cross-border payments and asset tokenization. Over the years, it has positioned itself as an infrastructure layer for financial institutions that need speed, low fees and compliance-friendly tools.
Mike Villano, Senior Vice President and Head of Digital Asset Products at US Bank, explained that the bank chose Stellar because of its native ability to freeze assets and reverse or recover transactions when necessary. Those features were seen as crucial for customer protection and regulatory adherence.
Villano highlighted that, in many other blockchain environments, safeguards such as transaction clawbacks would have to be coded into the business logic of each application. On Stellar, by contrast, these controls can be implemented at the protocol’s core operational layer, which the bank found especially appealing for risk management.
From a banking perspective, the possibility of undoing mistaken transfers, managing fraud cases or responding to legal orders without redesigning every application logic is a major consideration. For US Bank, this operational flexibility was a deciding factor in choosing Stellar over more commonly used networks like Ethereum or various Layer 2 solutions.
This decision is being read within the industry as another sign that established financial players may prioritize blockchains that can accommodate compliance, customer protection and regulatory requirements over those optimized purely for decentralization or speculative activity.
From years of talk to hands-on blockchain experimentation
Kurt Fields, blockchain lead and director at PwC, described the pilot’s main objective as demonstrating blockchain’s potential in a bank-grade, trusted setting. Speaking on US Bank’s “Money 20/20” podcast, Fields noted that the conversation around blockchain has evolved.
According to Fields, the industry has spent years discussing blockchain as a futuristic concept, but the focus has now shifted. Instead of being treated as a distant innovation topic, blockchain is being tested as a practical tool in environments that are heavily supervised by regulators and subject to strict operational standards.
The pilot on Stellar is being used to explore whether programmable money can deliver tangible benefits both to banks and to their customers. The team is experimenting with on-chain tools to see how automated rules, instant settlement and transparent transaction histories could improve existing banking processes.
By using a stablecoin framework, the pilot concentrates on a type of digital asset that is typically designed to maintain a stable value, which makes it easier to integrate with traditional accounting, risk and compliance systems than highly volatile cryptocurrencies.
For regulators and industry observers, such pilots offer a controlled view into how digital cash-like instruments might function alongside existing payment systems, without immediately replacing legacy infrastructure.
Tokenization research and 24/7 settlement ambitions
Beyond the stablecoin test, US Bank is also studying tokenized assets as a broader category. Villano indicated that the institution is in an exploratory phase, analyzing how tokenization could be used across different asset classes, not just for payments or deposits.
The research effort is evaluating how the ability to move value quickly, at any time and with high efficiency could apply to a wide range of financial instruments. That includes the idea of using tokenization to represent traditional assets on-chain, potentially allowing for near-instant settlement and around-the-clock operations.
In practice, this could mean that assets such as bonds, funds or other financial products might eventually be issued or mirrored in tokenized form, leveraging blockchain’s 24/7 availability and transparent tracking. However, US Bank has emphasized that this work is still at the research stage, and no concrete deployment timelines have been announced.
The institution has also acknowledged that, while the technology may offer clear operational advantages, regulatory clarity, risk assessments and customer demand. For now, the focus remains on pilots, proofs of concept and controlled experiments, rather than full commercial rollouts.
Even so, the fact that a major US bank is actively investing time and resources into this kind of research indicates that tokenization is being taken seriously as a potential future pillar of banking infrastructure, rather than being dismissed as a passing trend.
Stellar’s growing institutional profile and XLM’s market context
While US Bancorp is running its stablecoin pilot, the Stellar network itself is experiencing what many see as one of its most active periods of development, especially in terms of courting large financial institutions. Developers and partners are pushing new features designed to meet the expectations of banks, fintechs and regulated businesses.
Interestingly, this institutional momentum contrasts with the price behavior of Stellar’s native token, XLM. Despite solid fundamental developments and rising network activity, XLM’s market performance has recently moved in the opposite direction, testing key support areas rather than posting strong gains.
Community discussion around the US Bank pilot has been intense, with many observers arguing that institutional adoption can ultimately support network usage and potentially strengthen XLM’s long-term outlook. However, the link between real-world usage and token price can be indirect and may take time to materialize.
In parallel, the Stellar ecosystem has seen milestones such as the AUDD stablecoin — a token backed 1:1 by the Australian dollar — surpassing the $1 billion mark in organic transaction volume on Stellar. This figure is viewed as notable because it is attributed to real user and business activity, rather than artificial volume or incentive-driven trading.
Technically, Stellar has also introduced X-Ray as part of Protocol 25, bringing infrastructure for zero-knowledge-based privacy applications. This move aligns with a wider trend in which institutions are showing more interest in blockchains that include privacy features, rather than relying solely on fully transparent public networks.
Market signals, privacy focus and risk considerations
Recent reports in the digital asset space suggest that some institutional players are gradually shifting attention away from general-purpose public chains like Ethereum toward networks that offer more advanced privacy and compliance tools. Stellar’s push into zero-knowledge technology is seen as part of that competitive positioning.
Retail investors have also been paying close attention to privacy-focused and zero-knowledge (ZK) tokens such as Zcash (ZEC) and StarkNet (STRK), which have in some cases held up better than the broader market during periods of correction. This wider interest in ZK technology gives additional context to Stellar’s decision to invest in privacy-oriented upgrades.
On the technical analysis front, market observers note that XLM is currently trading near what is described as its most important support zone of 2025. The token has formed a descending wedge pattern twice in the same year, with the previous occurrence having led to a strong rebound.
Analysts also highlight that XLM has turned its 200-week exponential moving average (EMA) from resistance into support. This long-term moving average is often interpreted as a sign of robust demand around the $0.20 price area, though there are no guarantees that the level will hold in every market scenario.
Beyond price charts, on-chain metrics show that the total value locked (TVL) in Stellar’s DeFi ecosystem has reached a new high of roughly $168.8 million, even after a two-month decline in token price. This divergence between TVL and price is seen by some as evidence of growing underlying usage, though others caution that DeFi metrics can be volatile and influenced by a small number of large wallets.
How the pilot fits into the broader crypto and banking landscape
The US Bancorp stablecoin pilot is part of a broader pattern in which traditional banks are experimenting with blockchain-based payment rails without fully replacing their existing systems. Many institutions are choosing to start with limited-scope pilots, sandbox environments or internal use cases before considering large-scale customer-facing solutions.
In this context, Stellar’s mix of fast settlement, low transaction costs and protocol-level controls such as asset freezes and transaction reversals positions it as a contender for banks that need both efficiency and compliance tools. The network’s recent focus on privacy and enterprise features adds another layer to its institutional pitch.
For US Bank, the experiment offers a way to test programmable money, 24/7 settlement and tokenized asset concepts while still operating within the constraints of banking regulation. The involvement of PwC and the Stellar Development Foundation adds technical and strategic support, helping bridge the gap between legacy systems and new digital infrastructure.
At the same time, observers and potential users are being reminded that all forms of crypto exposure — whether through stablecoins, tokenized assets or native tokens like XLM — carry risks that require careful evaluation. Industry commentators stress that blockchain-related news should not be seen as financial advice and that any investment decisions should be backed by thorough, independent research.
The US Bancorp pilot, Stellar’s ongoing technical upgrades and the mixed performance of XLM in the market paint a picture of an ecosystem in transition. Established banks are cautiously testing blockchain’s promises while developers continue to build out infrastructure aimed at both institutional and retail users, leaving open questions about how quickly these experiments will translate into mainstream financial change.
