U.S. Bank successfully tested its stablecoin in a cross-border settlement.
The bank has officially conducted a pilot of its USBDC dollar-backed stablecoin on the Stellar Network sending an international transfer from the U.S. to Europe.
Recently, the Stellar Network was used to send USDC in private stablecoin transactions.
Stablecoin Banking
Banks can be the perfect adopters of stablecoins.
Although the banking industry in the U.S. first resisted the growth of stablecoins as suitable payment and financial instruments, there is now a clear shift occurring.
Regional and community banks are exploring a number of industry-led initiatives to modernize their internal infrastructures.
This is led by a mix of state banking associations and smaller projects like Cari or Hazel Network.
This means working with both tokenized deposits and stablecoins in order to protect the underlying depository base founded in local communities, which is critical for ensuring lending activities.
Large commercial and investment banks are also creatively seeking individual strategies.
Wells Fargo, Bank of America, Citi, and many others are actively in joint stablecoin projects and/or tokenized deposit systems, such as The Clearing House and SWIFT ledger.
Some of these are pursuing their own versions of stablecoins and tokenized deposits. For example, SoFi enables both structures depending on where and when a balance is kept or sent.
However, this goes beyond the U.S. as in Europe there are already bank-issued local currency stablecoins.
This is illustrated by Societe General’s SG-Forge EURCV stablecoin; the Qivalis Euro stablecoin project; and recent launch of a Swiss stablecoin pilot.
Most favor stablecoins for managing 24/7 transfers within many areas of finance, including but not limited to: payments, treasury routing, trading, FX, securities and derivatives, and more.
Importantly, no single bank wants to be left out of either stablecoins or tokenized deposits.
The difficulty at the moment is knowing which will have the most liquidity and likelihood to be accepted for its intended use-cases across any network in any given location.
