Banks turn to blockchain as US Bancorp tests token on Stellar

In an announcement on November 25, the Minneapolis-based lender said U.S. Bank is testing how a traditional bank can issue programmable money on a public blockchain, using Stellar as the settlement layer. The pilot is designed to evaluate stablecoins as an additional payment rail for clients, alongside existing card and wire infrastructure, while keeping issuance, controls and compliance inside a bank-grade environment.

Mike Villano, senior vice president and head of digital asset products at U.S. Bank, described the project as an experiment in using blockchain for day-to-day money movement, adding that the team is watching which use cases attract the most interest from customers. PwC’s blockchain lead Kurt Fields said the goal is to demonstrate that stablecoin-based settlement can be delivered under familiar risk, controls and audit standards for large financial institutions.

The pilot relies on features built into Stellar that allow an issuer to freeze or unwind transactions under defined conditions. According to U.S. Bank and its partners, those controls are important for aligning programmable digital tokens with requirements on know-your-customer checks, sanctions screening and reversibility in cases such as fraud, errors or court orders.

US Bancorp, which reports more than $660 billion in assets and annual revenue above $27 billion, joins a list of major banks exploring stablecoin issuance after the United States adopted a dedicated framework for dollar-pegged tokens through the GENIUS Act. Recent industry discussions have referenced exploratory work by Citi, Goldman Sachs, Barclays and Bank of America on joint or proprietary stablecoin ventures, as banks test how tokenized deposits and bank-backed stablecoins could sit alongside existing clearing systems.

The U.S. Bank pilot lands in parallel with a separate push from payments-focused firms. Klarna, a global digital bank and buy now, pay later provider, has announced KlarnaUSD, a dollar-backed stablecoin to be issued on Tempo, the payments-focused blockchain developed by Stripe and Paradigm. KlarnaUSD is currently live on Tempo’s testnet and is slated for a mainnet debut in 2026, using Stripe’s Bridge and its Open Issuance stack for stablecoin infrastructure.

Klarna says the token is aimed at cutting the cost of cross-border payments for consumers and merchants. Company materials cite an estimated $120 billion in annual global fees on cross-border transfers and point to stablecoin transaction volumes already surpassing $27 trillion a year, arguing that on-chain settlement can compress spreads and speed up settlement across markets where Klarna operates.

Across both banking and fintech sectors, stablecoin pilots are now being framed as a way to route customer payments over blockchains while preserving familiar regulatory structures. U.S. Bank’s test on Stellar focuses on bank-issued programmable money with built-in controls, while KlarnaUSD targets lower international transfer costs on Tempo; both are launching under clearer rules for dollar tokens and against a backdrop of rising institutional interest in regulated stablecoins.