U.S. Bancorp, the parent company of U.S. Bank, is stepping deeper into digital finance with a new pilot program exploring stablecoin payments on the Stellar blockchain. After months of internal testing, the banking giant is now experimenting with how stablecoins can streamline transactions and custody services for institutional clients.
Mike Villano, senior vice president and head of digital asset products at U.S. Bank, revealed in a recent podcast that the bank has been running live tests on the Stellar network. According to him, the goal is simple: understand where stablecoins can actually add value.
“We see stablecoins as another way to move money on a blockchain,” Villano said. “We’re curious to see which real-world use cases will stand out and what customers will ultimately want.”
The existence of the pilot was first made public by U.S. Bancorp President and CEO Gunjan Kedia during the company’s October earnings call. She noted that the bank is exploring stablecoins in two directions: custody and payments. While client demand for payments is still “muted,” the bank believes the landscape is shifting fast.
A Return to Crypto After Regulatory Relief
U.S. Bancorp has long been viewed as one of the more crypto-friendly U.S. banks, though regulatory pressures previously forced it to pause its Bitcoin custody services for nearly three years. Now, with more supportive policies under President Donald Trump including the repeal of the SEC’s controversial SAB 121 rule the bank is cautiously re-entering the sector.
Just last month, U.S. Bancorp reinstated institutional Bitcoin custody, and now, only weeks later, it has expanded its experimentation into stablecoins.
Why Stellar?
The choice of Stellar wasn’t random. Villano explained that Stellar’s architecture is designed with financial institutions in mind, offering built-in controls for compliance and security critical factors for large banks.
“We needed to think about KYC protections, online transaction controls, and even the ability to claw back transactions,” he said.
“Stellar allows issuers to freeze or reverse transfers directly at the blockchain layer, which is a major advantage.”
Stellar currently holds the 19th spot in the global stablecoin ecosystem, hosting roughly $212 million in stablecoin value. Since its launch in 2014, the network has been heavily focused on payments and remittances a natural fit for bank-grade stablecoin projects.
A Growing Trend Among Major Banks
U.S. Bancorp isn’t alone. Several major U.S. banks have recently intensified their stablecoin efforts:
- Citibank has been exploring the launch of its own stablecoin and has selected Coinbase as a key partner.
- Goldman Sachs and Bank of America joined Citi in forming a consortium to study institutional stablecoin applications.
- In Europe, nine top banks launched a similar initiative in September to test euro-pegged stablecoins.
With the global stablecoin market projected to grow sharply in the coming years, banks worldwide are racing to build the infrastructure needed to compete.
As of now, U.S. Bancorp has not revealed when its stablecoin product might officially launch or what form it will take. But the bank’s renewed momentum signals a broader shift: the world’s biggest financial institutions are no longer sitting on the sidelines they’re preparing for a stablecoin-driven future.
