U.S. Bank completes live USBDC payment as stablecoin market tops $300B

The fifth-largest U.S. commercial lender moved funds between its North America and Europe entities Wednesday using USBDC, its dollar-pegged token, settling on the Stellar blockchain as banks crowd into the roughly $300 billion stablecoin market.

"This live pilot demonstrates our ability to accelerate global cash management and money movement capabilities," Gunjan Kedia, chairman and CEO at U.S. Bank, said.

The Minneapolis-based lender, a unit of U.S. Bancorp (USB), tested minting and redemption of USBDC along with freezing and clawing back tokens. The transaction also exercised the bank's internally developed Digital Asset Platform, which connects blockchain networks with its finance, compliance, risk and operations systems. The pilot follows a November announcement that U.S. Bank would experiment with custom stablecoin issuance alongside the Stellar Development Foundation.

U.S. Bank said it is weighing USBDC for cross-border treasury operations, liquidity management and moving collateral, though it gave no timeline for a client rollout. The test lands as stablecoins — cryptocurrencies pegged to fiat such as the dollar, typically backed by reserves of cash and short-dated securities — spread from crypto trading into payments, remittances and treasury management, promising faster transfers and around-the-clock settlement.

Banks line up behind their own tokens

U.S. Bank is not alone. Last week, 21 financial institutions including Bank of America, Citigroup, Goldman Sachs and UBS said they would form a company to issue stablecoins for payments and digital asset transactions, targeting a dollar token in the first half of 2027 before expanding to other currencies. In May, a group of European lenders formed a consortium called Qivalis to issue a euro-backed stablecoin.

The moves come as stablecoin regulation takes shape across jurisdictions, giving banks a clearer path to issue their own tokens rather than rely on third-party issuers such as Tether and Circle. Jack Dorsey's Block separately filed with the U.S. Office of the Comptroller of the Currency to charter a national trust bank, Builders Bank & Trust, to hold bitcoin and stablecoins under federal supervision.

For Stellar, the selection as U.S. Bank's settlement layer adds a marquee banking use case to a network better known for cross-border payments. XLM traded near $0.1895, little changed, as of the announcement. A move of USBDC beyond internal transfers to client-facing treasury products would give the network a recurring institutional flow that most public blockchains still lack.

The open question is whether U.S. Bank brings USBDC to corporate clients, where the real volume sits. A commercial rollout would put a top-five U.S. bank in direct competition with the stablecoin ventures forming across Wall Street and give regulators a live test of a bank-run token on public rails.

This article is for informational purposes only and does not constitute investment advice.