America’s fifth-largest bank US Bancorp tests stablecoin on Stellar
U.S. Bancorp is testing its own stablecoin on the Stellar blockchain, the firm said.
The banking giant's push into stablecoins puts it among many other traditional financial institutions, like Bank of America and Citi, which are taking a real interest in digital assets backed by U.S. dollars and U.S. Treasurys. U.S. is the fifth-largest bank as of Sept. 30, with $671 billion assets under management, according to the Federal Reserve.
It appears security and control over transactions played a role in U.S. Bank choosing Stellar.
"For bank customers, we have to think about other protections around know your customers ... the ability to clawback transactions, and one of the great things about the Stellar platform as we did some more research and development on it was learning that they have the ability at their base operating layer to freeze assets and online transactions," said Mike Villano, U.S. Bank's senior vice president, enterprise innovation.
Currently, the two largest USD-pegged stablecoins are Tether's USDT and Circle's USDC.
Last month, the Minneapolis-based U.S. Bank formed a digital assets division geared towards growing "revenue from emerging digital products and services such as stablecoin issuance, cryptocurrency custody, asset tokenization and digital money movement."
"Clients increasingly want to understand how digital assets can help them safely move money, store deposits and use tokenized assets, among other potential use cases," Dominic Venturo, chief digital officer at U.S. Bancorp, said at the time.
Stellar's blockchain has managed 99.99% uptime for the last decade, according to a statement. The network is also used by financial firms like Taurus, Franklin Templeton, WisdomTree, and Circle.
The XLM token, native to Stellar, is down approximately 2.9% on the day to $0.25, in line with the general slide in crypto asset prices on Tuesday, according to The Block's price page. XLM is down nearly 72% from an all-time high of $0.88.
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