U.S. Bank Moves Dollars on Stellar, Reverses Payment

On Wednesday, U.S. Bank transferred dollars from North America to Europe on the public Stellar blockchain using a token it created called USBDC.

The bank issued USBDC, converted dollars into the token, moved it to a European account the bank controls, then used issuer permissions on Stellar to freeze and reclaim the tokens. U.S. Bank said all steps completed as intended.

In parts of its announcement the bank called the activity a launch and in other parts described it as a test. The USBDC token is not available for customers to buy or use.

Stellar is a public blockchain where transactions are visible to anyone. Its token framework allows an issuer to set controls that can freeze accounts and remove tokens held in other wallets.

U.S. Bank said the experiment was aimed at addressing cash-management needs such as moving funds outside normal banking hours, processing weekend payrolls, and transferring cash between subsidiaries.

Gunjan Kedia, U.S. Bank’s chairman and chief executive officer, said: “This live pilot demonstrates our ability to accelerate global cash management and money movement capabilities.” Jamie Walker, head of digital assets and money movement at U.S. Bank, added: “Our focus remains on delivering solutions that solve real client challenges while maintaining the safety, security and reliability that clients expect from U.S. Bank.”

Bank-controlled tokens differ from widely used dollar-backed stablecoins that trade on open markets. Many stablecoins are designed so holders can move and trade balances without an issuer having the power to unilaterally reverse or destroy funds. The USBDC token remained subject to issuer controls on the public ledger.

U.S. Bank is not part of a separate industry effort to create a shared dollar token planned for 2027. Federal Reserve data show U.S. Bank held about $683 billion in assets in March, placing it among the largest domestic commercial banks.

Regulatory developments have increased interest in bank-backed and licensed-dollar token arrangements. Some firms are offering alternatives aimed at enterprise users that currently rely on established stablecoins.

U.S. Bank said the pilot demonstrated the technical steps needed to move dollars on a public ledger while retaining issuer-level controls to halt or reverse payments.