US Bank partners with Stellar to test stablecoin

• Key insight: U.S. Bank has completed a test of its stablecoin, processing a payment between North America and Europe. 
• What's at stake: Banks are pursuing stablecoin projects, but there have not been a lot of formal releases, according to American Banker research. 
• Forward look: U.S. Bank plans to add more uses beyond cross-border payments and is also working on the Open Standard stablecoin project, which is expected to issue a coin later this year. 

Stablecoins have gotten a lot of attention but not a lot of tangible releases, at least among banks. U.S. Bank this week took an early mover step toward issuing its own stablecoin.

The bank has executed a test payment using USBDC, the institution's U.S. dollar-backed stablecoin, enabling a transfer between North America and Europe. It's a prelude to adding more uses for the stablecoin in the coming months.

The Minneapolis-based U.S. bank is moving forward with USBDC as it also participates in Open USD, a pending stablecoin consortium that includes more than 140 banks, fintechs and crypto firms. It is also operating in an environment in which fintechs have dominated the stablecoin market and banks are playing catch-up. 

US Bank and stablecoins

U.S. Bank initially partnered with Stellar and PwC in late 2025 to test the stablecoin, which was minted, paid and redeemed inside the bank's existing risk, compliance and operations. The USBDC transaction used the Stellar blockchain, and was part of U.S. Bank's effort to demonstrate it could transfer digital assets on a blockchain while maintaining integration with the bank's core finance, risk, compliance and operations systems. 

By focusing on an international payment, U.S. Bank chose a common early use for stablecoins as a bridge between parties using different traditional currencies. In this case, the stablecoin acts as a faster and cheaper means to execute a cross-border payment than the existing method of using correspondent banks to manage currency conversion and compliance. 

Following the successful pilot, U.S. Bank is exploring other uses for the stablecoin such as enhanced liquidity management, collateral mobility, cross-border treasury operations and other institutional use cases. 

"This pilot is another step forward in our broader digital asset strategy," Jamie Walker, head of digital assets and money movement at U.S. Bank, said in a release. "Our focus remains on delivering solutions that solve real client challenges while maintaining the safety, security and reliability that clients expect from U.S. Bank. "USBDC is part of a larger stablecoin strategy at U.S. Bank. The bank provides custody service for Anchorage Digital Bank's stablecoin platform, among other clients; and is also offering bitcoin custody services and a cryptocurrency ETF. 

U.S. Bank is also participating in the Open USD consortium, which includes BNY, Huntington Bank, Citizens Bank, American Express, Visa, Mastercard, Stripe, Adyen, Affirm, Klarna and Coinbase, among others. 

"USBDC is one component of a broader strategy that also includes our participation in the Open Standard and Zelle consortiums, with each solution designed to address distinct client needs and use cases," U.S. Bank's Walker told American Banker in an email. In addition to USBDC and consortium participation, U.S. Bank will continue to collaborate with GENIUS Act-compliant third-party stablecoin issuers where aligned to client needs and expectations, enabling access to a broader range of digital asset solutions driven by market demand and use case requirements, Walker said. 

"We maintain a long-term focus on interoperability across digital asset ecosystems, tokenized real-world asset networks, and other blockchain platforms where client demand and market activity grow."

Why would banks want a stablecoin?

Stablecoins tied to cryptocurrency firms such as Circle and Tether have dominated the stablecoin market thus far as banks have awaited regulatory clarity. Stablecoins are not being widely used for payments, but are gaining ground as a way to improve processing. Remittances, B2B payments and capital markets settlements are three often-cited use cases for stablecoin payments. But the actual payments volume is less than 1% for remittances and less than 0.01% of B2B and capital markets payments, according to McKinsey.

Banks also appear to favor tokenized deposits, a theoretically less risky alternative to stablecoins. Twenty-four of the largest 50 banks have tokenized deposits "on their radar" as of the first quarter, up from 19 the prior quarter, according to American Banker research on digital assets. That compares to the 17 banks that have stablecoins on their radar, up from 15 in the fourth quarter of 2025. 

But this gap between publicized projects and actual payment usage doesn't diminish stablecoins' long-term potential, according to McKinsey. Instead, it clarifies the greatest potential for utility and potential disruption. McKinsey suggests banks base use cases on business benefits, scale, regulatory constraints and ability to integrate with existing systems.

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"Stablecoins will become a product of scale and interoperability," Tony DeSanctis, senior director at Cornerstone Advisors, told American Banker. "It is much more likely that a consortium of banks or payment processors will be the end state solution for stablecoins."

Similar to Zelle for P2P payments, the ultimate stablecoin solutions will have to be mass adopted by the entire industry, according to DeSanctis. 

"Most of the smaller consortiums or individual banks offering coins are likely to lose out to the larger scale solutions that support multiple institutions," DeSanctis said.