US Bank is piloting the issuance of a stablecoin on the Stellar network, working with the Stellar Development Foundation and PwC to test an institutional model for tokenized assets. This initiative reopens expectations for XLM by enabling a compliant route to deposit-backed tokens on established banking infrastructure.
Bank-grade pilot positions Stellar for compliant tokenization
The program merges traditional banking structures with Stellar-native capabilities such as near-instant settlement, high network availability and integrated compliance tools. One highlighted functionality is “asset freeze”, an on-chain mechanism allowing issuers to block specific transactions to meet regulatory or sanctions-related requirements.
The objective is to establish a regulated deposit-token framework supported by Stellar’s Protocol 23 parallel transaction architecture and ISO 20022 compatibility. XLM’s network adoption metrics provide context—TVL reached USD 169.30 million (400 million XLM in September) and the network approaches 10 million accounts, while the token has seen recent gains of 2.3%–3.6% in spot markets alongside volume growth.
Institutional participation from a major U.S. bank signals validation for blockchain-based payments and asset tokenization. This catalyst can strengthen demand for XLM, though its trajectory remains exposed to volatility, regulatory constraints across jurisdictions and systemic macro-risk considerations.
Regulators and supranational entities continue to flag systemic vulnerabilities, referencing scenarios like a potential “stablecoin shock” described by the ECB, concerns on regulatory arbitrage from the Bank of Italy and stability risks highlighted by the BIS. The Bank of Korea suggests issuance should originate from supervised banks to limit policy disruption, aligning with the cautious regulatory stance.
In the U.S., the GENIUS Act under discussion proposes reserve mandates and AML/BSA compliance requirements for issuers. Market forecasts point to rapid expansion—USD 280 billion projected for 2025 and as much as USD 1.9–4.0 trillion by 2030—framing both opportunity and risk in a multi-issuer ecosystem with liquidity fragmentation concerns.
Against its peers, Stellar differentiates itself through its compliance-centric but peer-to-peer-preserving model, contrasted with more centralized alternatives like XRP. This positioning reinforces Stellar’s competitive narrative in remittance and settlement infrastructure.
US Bank’s pilot may represent a turning point for bank-linked tokenization, setting practical benchmarks for regulated issuance on public networks. The decisive factors now lie in successful pilot execution and the evolution of regulatory frameworks, which will determine whether adoption accelerates or stalls under structural frictions.
