Last updated on January 3rd, 2026 at 03:12 pm
Quick Breakdown
- U.S. Bank, the fifth-largest commercial bank in the U.S., is testing the issuance of custom stablecoins on the Stellar blockchain network.
- The pilot, conducted with PwC and the Stellar Development Foundation (SDF), aims to demonstrate that traditional banks can safely issue programmable money on a public blockchain while complying with strict regulatory requirements.
- The bank chose Stellar for its built-in compliance features, specifically its ability to freeze assets and unwind or claw back transactions, which aligns with essential banking protections and Know-Your-Customer (KYC) protocols.
U.S. Bank has unveiled a pilot program to issue custom stablecoins on the Stellar blockchain. This initiative, developed in collaboration with consulting powerhouse PricewaterhouseCoopers (PwC) and the Stellar Development Foundation (SDF), represents a pivotal moment at the crossroads of traditional finance and programmable digital assets.
The announcement was featured during the bank’s Money 20/20 podcast, titled “The Tokenized Future of Banking.” The primary objective of this pilot program is to investigate how conventional banks can securely issue dollar-backed stablecoins on a public blockchain while ensuring full regulatory compliance.
According to Mike Villano, Senior Vice President and Head of Digital Asset Products at U.S. Bank, the core concerns for bank customers include protections such as KYC, the ability to reverse transactions, and the ability to claw back funds.
Stellar was explicitly selected because its underlying operating layer includes the functionality to freeze assets and unwind transactions, meeting these critical regulatory and compliance requirements.
.@usbank is testing custom stablecoin issuance on the Stellar network.
Real infrastructure testing for regulated deposit tokens — the kind that could reshape how banks move money.
Here’s what’s happening.https://t.co/C7sqTIDJZF pic.twitter.com/ZFXC5Q1a49
— Stellar (@StellarOrg) November 25, 2025
With a history of 99.99% uptime and transactions that settle in 3–5 seconds for a fraction of a U.S. cent, Stellar offers the reliability and cost-efficiency needed for institutional adoption.
Stablecoins as a compliant banking solution
The bank’s move is a clear indication that institutions are now viewing stablecoins as more than just speculative crypto assets; they are programmable payment vehicles. Mike Villano emphasized that this technology is key to delivering faster, cheaper, and 24/7 payment solutions. The bank’s commitment to digital assets is further demonstrated by the formation of a dedicated Digital Assets and Money Movement division, which focuses on both cryptocurrency custody and the facilitation of stablecoin payments.
In a related development, Brale also launched CUSD, a new institutional USD-pegged stablecoin secured 1:1 by U.S. Treasuries and cash-equivalent reserves. Built on the Canton Network, CUSD features a privacy-first architecture that allows confidential transactions and selective disclosure for regulatory compliance, offering a secure and efficient digital dollar transfer tool without exposing sensitive market data.
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