- U.S. Bancorp tests stablecoin on Stellar, leveraging XLM’s security features.
- Stellar’s compliance features help U.S. Bancorp meet regulatory requirements.
- XLM price action shows bullish signs amidst institutional blockchain interest.
U.S. Bancorp has begun testing its proprietary stablecoin on the Stellar blockchain, marking a significant step in its digital asset strategy. The Minneapolis-based financial institution confirmed the use of Stellar’s XLM network for this initiative, focusing on leveraging blockchain’s secure and compliant infrastructure. According to Bloomberg, U.S. Bancorp has formed a dedicated digital assets unit, which aims to drive innovation in crypto custody and stablecoin payment solutions.
This test follows the bank’s ongoing efforts to tap into the growing demand for digital currency solutions in the financial industry. President and CEO Gunjan Kedia noted that the bank is prioritizing secure digital asset storage and the use of stablecoins for payments. Internal research at U.S. Bancorp has revealed substantial market interest in payment use cases for stablecoins, with the bank moving ahead with the pilot.
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Why U.S. Bancorp Chose Stellar (XLM) for the Stablecoin Pilot
U.S. Bancorp’s decision to use the Stellar blockchain is based on its robust compliance features, particularly the ability to freeze assets and reverse transactions at the protocol level. These built-in controls are essential for ensuring that U.S. Bancorp can meet regulatory requirements while adopting blockchain technology. Mike Villano, Head of Digital Asset Products at the bank, highlighted that these features help enforce KYC protections and provide added security for transactions, aligning with the bank’s strict regulatory standards.
Stellar has proven its capability in the institutional market, processing over $32 billion in transfers last year. By September, Stellar’s network had reached nearly 10 million unique addresses, underscoring its growing adoption by major financial players. Notable firms like Circle (USDC issuer) and Franklin Templeton are already using Stellar to issue tokenized financial products, validating the blockchain’s strength in supporting large-scale financial transactions.
Rising Institutional Interest in Digital Assets and Blockchain
This initiative also reflects the broader trend of increasing institutional interest in blockchain solutions, driven by clear regulatory frameworks and the demand for compliant digital asset services. According to Jose Fernandez da Ponte, President of the Stellar Development Foundation, institutional demand for blockchain services is rapidly increasing, which is why U.S. Bancorp’s decision to test its stablecoin on Stellar is a timely and strategic move. The test signals the bank’s ambition to stay at the forefront of digital asset developments in the financial services industry.
U.S. Bancorp’s stablecoin test follows the bank’s return to crypto custody services, which it had paused due to previous SEC regulations. With recent regulatory changes under the current administration, the bank has resumed offering Bitcoin custody services for registered investment funds. By incorporating a stablecoin pilot, U.S. Bancorp is expanding its digital asset offerings and reinforcing its commitment to becoming a leader in the digital finance space.
XLM Price Action and Market Sentiment
As U.S. Bancorp’s stablecoin test progresses on Stellar, XLM’s price action is garnering attention from investors. Currently trading around $0.3145, the cryptocurrency has seen a 1.12% increase. The RSI (Relative Strength Index) is hovering around 37.83, indicating that the market is in a neutral to slightly oversold territory, signaling potential for a price reversal.
The chart also shows that XLM is trading below its 20-day Simple Moving Average (SMA), indicating some bearish pressure in the short term. However, recent price action suggests the possibility of an upward movement, with the next resistance level near $0.32. Traders and investors are keeping a close eye on this key level, as it could signal a potential breakout and further positive momentum for XLM, especially with the increased attention from institutions like U.S. Bancorp.
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