U.S. Bank has launched a trial to issue a custom stablecoin on the Stellar network, an initiative supported by PwC and the Stellar Development Foundation (SDF) that seeks to integrate programmable money within a regulated banking framework. The project is being developed in late 2025 and entails operational and regulatory changes for treasuries and payment infrastructures.
Stellar offers features that address traditional banking requirements: integrated KYC controls, the ability to freeze assets and mechanisms to undo or recover transactions. KYC (know your customer) is the process of verifying the identity of users and entities. Mike Villano, Senior Vice President and head of digital asset products at U.S. Bank, summarized the institutional approach: “safety and control are non‑negotiable” —security and control are non‑negotiable—, positioning these functions as a prerequisite for integration.
Operationally, Stellar presents attractive metrics for treasurers: near‑99.99% availability, transaction settlement in 3–5 seconds and minimal fees, often a fraction of a US cent. Those characteristics reduce friction in payments and remittances and change the cost/speed equation versus legacy rails. Regulatory experience and recent legislative frameworks have provided greater clarity on the issuance and operation of stablecoins, making it easier for regulated entities to explore trials.
PwC, a partner in the project, has highlighted the potential of stablecoins to accelerate international payments and improve liquidity management in corporate treasuries.
Technology and compliance: why Stellar appeals to banks
The migration of regulated stablecoins to Stellar already has operational precedents: the planned expansion of PayPal USD (PYUSD) to Stellar, subject to NYDFS approval, and previous launches of regulated coins on the network, such as GYEN, ZUSD and EURC. That move is seen as a validation of the platform’s utility for scaled use cases.
Beyond efficiency, the trial emphasizes that stablecoins can facilitate remittances and provide a safe haven in high‑inflation or unstable environments, expanding access to basic financial services.
However, the operation introduces concrete risks for operators and managers: private key management, vulnerabilities in contracts and interoperability tensions with legacy systems increase the risk surface. The European Central Bank has expressed concerns about systemic effects from the accelerated growth of stablecoins, underscoring the need for macroprudential oversight.
U.S. Bank’s trial on Stellar, backed by PwC and SDF, represents a deliberate step toward banking tokenization focused on control and compliance; it offers clear operational benefits but requires managing technological and regulatory risks.
