The bank announced Wednesday (Sept. 9) that it had used the dollar-backed USBDC for a cross-border payment between U.S. Bank entities in North America and Europe.
“As one of the first bank-issued stablecoins deployed on a public blockchain, USBDC promises the potential of leveraging a new technology to bridge gaps in the global banking system with 24/7 transaction capabilities,” U.S. Bank said in a news release.
The pilot transaction used the Stellar blockchain, which the bank says shows its ability to transfer value on chain while still in harmony with its core finance, risk, compliance and operations infrastructure.
The release added that the pilot, “which evaluates minting, payment redemption, freezing and clawback capabilities,” also validates the bank’s in-house digital asset platform, used to issue, manage and move tokenized assets while connecting traditional banking infrastructure and blockchain networks.
“This live pilot demonstrates our ability to accelerate global cash management and money movement capabilities,” U.S. Bank CEO Gunjan Kedia said. “We are excited to create value for our clients and harness the power of a new technology within the banking system.”
The launch comes at a time when the stablecoin market “is entering a period of flux,” PYMNTS wrote last week.
“While the stablecoin market’s first phase rewarded issuance and liquidity, this week’s headlines suggest the bigger competition is moving somewhere else,” that report said.
At the time, 21 of the world’s biggest banks had announced plans for a jointly backed stablecoin venture, while the Securities and Exchange Commission (SEC) prepared transfer-agent rules for a market “in which blockchain can underpin securities ownership records.”
SoFi, meanwhile, had teamed up with Payward, parent company of cryptocurrency exchange Kraken, to join together banking and digital asset markets.
Banks, custodians, payment networks and infrastructure providers are simultaneously developing the systems required to move tokenized money and assets between otherwise fragmented ecosystems, PYMNTS wrote.
“The common thread is interoperability,” that report added. “As more banks, FinTechs and financial institutions issue their own forms of digital money, the scarce asset may stop being the stablecoin and become the network capable of making all those stablecoins usable together. That’s where the market starts looking familiar to payment veterans.”
