US Bank is testing the issuance of custom stablecoins on the Stellar blockchain network.
In October, US Bank CEO Gunjan Kedia mentioned during an earnings call that the bank was exploring stablecoins, even though customer interest has been limited. The bank is collaborating with the Stellar Development Foundation (SDF) and PwC to investigate the safe issuance of programmable money on the public blockchain.
In a video released by the bank, Mike Villano, SVP and head of digital asset products at US Bank, stated that stablecoins represent “another way to move money on a blockchain” and that the bank views blockchains as an alternative payments rail. He expressed eagerness to see what use cases will arise and which customers will show the most interest.
The pilot program focuses on utilizing stablecoins to facilitate faster and more cost-effective cross-border transactions while ensuring strong customer verification and the ability to reverse transactions. Villano explained, “For bank customers, we must consider protections related to know-your-customer requirements, the ability to unwind transactions, and the capacity to claw back transactions. One of the benefits of the Stellar platform is its capability at the base operating layer to freeze assets and reverse transactions.”
US Bank is not the only major financial institution exploring stablecoins; companies like Citi and JPMorgan have also been working to leverage this technology in recent months.