Bank of America tests using its own stablecoin for cross-border Stellar payments

Bank of America successfully completes USBDC stablecoin cross-border payment pilot based on the Stellar network

U.S. Bank announced that it has successfully completed a real-time cross-border payment pilot using its own stablecoin USBDC. The stablecoin is issued on the public Stellar network. The test involved transfers of funds between U.S. banking entities in North America and Europe, and verified key control functions of stablecoins, including minting, redemption, freezing and recovery mechanisms.

The bank said that the pilot is aimed at verifying its internally developed "Digital Asset Platform." The platform aims to connect tokenized asset and stablecoin operations with existing bank risk management, compliance and operations systems. Bank of America said on Wednesday that it is currently evaluating more application scenarios, including cross-border treasury operations, liquidity management and collateral placement.

Core Points

• Bank of America completed the USBDC's real-time cross-border payment test on the Stellar network, enabling value transfer between North American and European entities.
• The pilot not only includes transfer functions, but also covers operational-level stablecoin capabilities such as casting, redemption, freezing and recovery.
• Bank of America views this move as strong evidence that its digital asset platform can integrate stablecoin workflows with traditional bank controls.
• The bank is exploring next steps in applications such as on-chain collateral transfer, cross-border treasury management and liquidity management.

USBDC pilot focuses on real payments and stablecoin control

According to Bank of America, the USBDC was issued and transferred on the public Stellar blockchain during the pilot period. Unlike small demonstrations that focused on technical connectivity, this test focused on bank-level business processes: moving funds between U.S. banking entities in different regions, using stablecoins as a settlement mechanism.

Importantly, Bank of America said the trial also verified the management and risk characteristics of stablecoins-specifically, including minting and redemption functions, and the ability to freeze and recover funds. For banks, these controls are not optional "extras", but are core elements of compliance and operational governance when monetized value is used outside of internal books.

Bank of America linked these results to its "digital asset platform." This is the system the bank has been building to bridge the gap between tokenized assets and traditional banking infrastructure. The bank's emphasis on integration with risk, compliance and day-to-day operations suggests that it is trying to move beyond the proof-of-concept stage to practical solutions that can be integrated into existing regulatory and internal control frameworks.

Digital asset platform becomes a bridge between traditional banks and tokenization channels

Bank of America said the transaction confirmed that its digital asset platform can connect the stablecoin life cycle to established banking workflows. From an operational perspective, this means that the agency is committed to ensuring that token issuance and transfer activities are subject to the same strict operational disciplines as traditional banking systems.

The bank is also exploring broader applications of the platform. Bank of America specifically pointed out areas such as cross-border treasury operations, liquidity management and collateral placement-areas where the operating expenses of settlement and the speed of capital flows can materially affect how financial institutions manage capital and risk.

Bank of America's statement is important to investors and market participants because it highlights a recurring theme in institutional adoption of stablecoins: technology itself is only part of the story. Whether it can be integrated with compliance, governance and operational monitoring often determines whether a pilot can develop into a reusable product.

Bank of America expands its early work on the Stellar Network

This cross-border pilot builds on Bank of America's early digital asset efforts. The bank said it had established a special "Digital Assets and Capital Flows" department in October 2025, focusing on stablecoin issuance, crypto asset custody, asset tokenization and digital capital flows. This internal structure shows that the project is viewed as a long-term strategic initiative rather than a short-term experimental business.

Bank of America has previously stated that it has been testing customized stablecoin offerings on the Stellar network since at least November 2025. At that early stage, the bank said it partnered with PricewaterhouseCoopers (PwC) and the Stellar Development Foundation. Looking at the comprehensive timeline, this shows that the agency has expanded from testing stablecoin issuance on the blockchain to a broader operational practice that includes cross-border transfers and complete stablecoin administrative functions.

Readers focusing on the institutional stablecoin space should pay attention to the bank's seemingly clear evolution path: first, establishing issuance capabilities and ecosystem partnerships, second, improving operating mechanisms, and finally running real-time cross-border settlement scenarios designed to test operations and governance levels.

The development momentum of stablecoins in the banking industry continues to increase

As the banking industry as a whole accelerates the stablecoin project, although some industry people disagree with the behavior of stablecoins in the market, Bank of America's announcement is still particularly prominent. Previous reports pointed out that Bank of America had opposed proposals to allow stablecoin issuers and crypto platforms to provide revenue or rewards. Even so, major lenders and financial institutions are advancing their respective token programs, often positioning them around payments, settlements and institutional work processes rather than consumer revenue incentives.

Other reports showed that on September 1, 2025, 21 large financial institutions including Bank of America, Citigroup, Goldman Sachs, Deutsche Bank and UBS announced plans to form a company to issue stablecoins. According to relevant reports, the group's plan is to launch dollar-denominated stablecoins in the first half of 2027 and subsequently expand to other G7 currencies, targeting wholesale, institutional and retail use cases. Highlights of the statement include cross-border payments and digital asset settlements.

Meanwhile, Fidelity has entered the stablecoin market through its Fidelity Digital Dollar (FIDD), a product that is open to retail and institutional investors through Fidelity Digital Assets issuance. According to DefiLlama data quoted in the original report, as of writing, FIDD's circulation was approximately US$50 million, and DefiLlama provided continuous tracking data on the supply of stablecoins.

For market participants, these parallel efforts highlight the fact that the industry is not waiting for a single "breakthrough" policy moment. Instead, large banks appear to be pursuing stablecoin infrastructure that can support cross-border and settlement use cases, while addressing regulatory and market structure issues.

Next, investors and builders should focus on whether such pilots translate into broader deployments and produce measurable adoption rates-such as increased settlement frequency, expanded corridor coverage, or more formal links to treasury and collateral workflows-and how institutions manage stablecoin governance functions under real-world regulatory review.