US Bank has started testing a bank-backed digital dollar on the Stellar public blockchain, marking one of the first times a major U.S. lender has piloted stablecoin payments on an open network with built-in regulatory controls. The trial, conducted with help from the Stellar Development Foundation and PwC, examines whether mainstream banks can move dollars on public ledgers while maintaining the ability to freeze assets or reverse transactions when regulators or courts require it.
What Happened: Bank Pilots Digital Dollar
US Bancorp announced the stablecoin pilot during a Money 20/20 podcast featuring executives from the bank, PwC and the Stellar Development Foundation.
The effort comes as financial institutions face growing pressure to explore tokenized payments following shifts in the political climate under President Donald Trump.
Mike Villano, who leads digital-assets work at US Bancorp, said the bank selected Stellar specifically because the blockchain offers controls that matter to regulated finance—including the ability to freeze an asset or unwind a transaction.
The network processes transactions in three to five seconds on average, according to Stellar's technical documentation. Transaction fees run approximately $0.000005 per operation, and the blockchain includes built-in account controls that let issuers add know-your-customer checks, freeze functions and clawback options.
Those features align with what US Bancorp says it needs for regulated payments and custody applications.
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Why It Matters: Compliance Testing
The pilot represents a compliance-first approach rather than a speculative trading experiment. US Bancorp is treating the trial as an extension of its payments and custody services, not as a retail crypto product for consumers.
The bank has not disclosed a rollout date or specified whether the pilot will serve institutional partners exclusively or expand to a wider customer base.
Last month, the bank announced a dedicated unit focused on stablecoins and money movement, signaling that the current trial fits into a broader strategy to build on-chain services. Market participants will monitor whether the experiment demonstrates that a public blockchain can satisfy bank regulations without sacrificing the ability to correct errors or comply with court orders. Some momentum in the sector stems from regulatory developments and political shifts that have encouraged executives to explore tokenized cash and securities.
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