U.S. Bank Sends Real Dollars on Public Blockchain, Keeps Kill Switch

On Wednesday, U.S. Bank moved dollars between North America and Europe using a public blockchain. The network is transparent, but only the bank has the ability to reverse the transaction.

The bank presents this as a launch, yet its own statement refers to it as a pilot. U.S. Bank transferred money to itself using a token called USBDC, which is not available for customer purchase.

The Kill Switch for U.S. Bank

A core tenet of cryptocurrency is that no one can reclaim your funds. USBDC intentionally violates that principle. The bank selected Stellar, where its native token XLM is the 19th-largest by market cap.

On Stellar, the token issuer can freeze an account and also burn tokens held in another wallet.

The bank tested creating the token, redeeming it, freezing it, and retrieving it. Each operation succeeded.

This is therefore not a competitor to existing dollar stablecoins used by traders. It functions like a wire transfer that can be reversed.

“This live pilot demonstrates our ability to accelerate global cash management and money movement capabilities,” read an excerpt in the bank’s statement, citing Gunjan Kedia, chairman and chief executive officer at U.S. Bank.

Wall Street Split, and the U.S. Bank Stablecoin Walked Away

One week prior, 21 banks and asset managers committed to a shared dollar token planned for 2027. Participants included Bank of America, Goldman Sachs, and Deutsche Bank. U.S. Bank was not among them.

🔥 ADOPTION: 21 major financial institutions are teaming up to launch a U.S. dollar-pegged stablecoin in H1 2027.

The group includes @GoldmanSachs, @BankofAmerica, @Citi, @DeutscheBank, @UBS, and @WellsFargo.

The group plans to expand into other G7 currencies.

— Cryptic (@Cryptic_Web3) September 2, 2026

That fact is not being openly discussed. The majority of Wall Street favors a collective token. U.S. Bank prefers to have its own brand on the dollar.

According to Federal Reserve data, U.S. Bank was the sixth-largest domestic commercial bank as of March, with $683 billion in assets. That scale allows it to operate independently.

The regulatory environment is supportive. BeInCrypto noted in August that updated Treasury stablecoin regulations benefit blockchains that use licensed dollars.

The opportunity is mundane but vast: weekend payroll disbursements, cash stuck in subsidiary accounts, and collateral that remains immobile until the start of the week.

“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,” said Jamie Walker, head of digital assets and money movement at U.S. Bank, in the same release.

Circle has reason for concern, but not from this particular test. Competitors targeting USDC's corporate clients have demonstrated how quickly that user base can be eroded.

Stellar's XLM token saw little price movement, trading at around $0.19 after a 0.6% daily gain. Investors prefer the version they can actually hold.