US Bank is testing the issuance of custom stablecoins on the Stellar blockchain network.
In October, US Bank CEO Gunjan Kedia said on an earnings call that the lender was working on stablecoins, despite muted interest from customers. Now, it has been revealed that the bank is working with the Stellar Development Foundation (SDF) and PwC to explore the safe issuance of programmable money on the public blockchain.
Speaking about the project in a video posted by the bank, Mike Villano, SVP head of digital asset products, US Bank, says that stabelcoins are "another way to move money on a blockchain and we look at blockchains as an alternative payments rail and we're very interested to see what use cases are going to manifest from that and what customers are going to be most interested in."
The pilot is concentrated on how a stablecoin can be used to make cross-border transactions faster and cheaper while also ensuring strong customer verification and transaction reversals.
Explains Villano: “For bank customers, we have to think about other protections around know your customers, the ability to unwind transactions, 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 unwind transactions.”
US Bank is far from the only major Wall Street player to investigate stablecoins, with the likes of Citi and JPMorgan both making moves to tap into the technology over the last few months.