US Bancorp is testing a stablecoin pilot on the Stellar blockchain, becoming the latest major bank to explore the technology.
The initiative is being developed in collaboration with PricewaterhouseCoopers (PwC) and the Stellar Development Foundation (SDF).
“In short, institutions are here. A new financial infrastructure is emerging, and US Bank, PwC, and SDF are helping drive the next wave of digital banking,” the Stellar Development Foundation said Tuesday.
US Bancorp is the publicly traded parent company of US Bank, which manages more than $664 billion in assets and generates over $27.5 billion in annual revenue, according to the company.
PwC director and blockchain lead Kurt Fields said the pilot is designed to show how blockchain can operate in a secure, bank-grade environment. Speaking on Tuesday’s episode of US Bank’s Money 20/20 podcast, Fields noted that the industry has moved beyond experimentation.
“We’ve been talking about blockchain for years, and we’re now at a point where it’s no longer about innovation,” he said.
“It’s about practical application in a rigorous, highly regulated environment where we’re taking advantage of the tooling onchain in this case on the Stellar network to demonstrate that the promise of programmable money actually yields benefits for not only the institution but the customers that they serve.”
Stellar blockchain chosen for its asset-control features
Launched in 2014, the Stellar network is an open-source, decentralized blockchain built for cross-border payments and asset tokenization.
Mike Villano, US Bank’s head of digital asset products, said the bank selected Stellar for the pilot because the network supports transaction reversals and clawbacks.
Stellar offers “the ability at the base operating layer to freeze assets and unwind transactions,” Villano noted — a capability the bank views as important for customer protection. “Often, you’d need to build that into the business logic itself, but in this case, it can be done at the core blockchain layer, which was very compelling to us,” he said.
US Bank explores broader tokenization use cases
Villano added that US Bank is also researching tokenized assets.
“We’re doing further research into tokenized assets, and if you can apply the advantages of moving value quickly, around the clock, and with high efficiency, you can extend that to a wide range of asset classes,” he said.
“So we’re excited to see where that research goes for us as well.”
