Bank of America piloted the launch of USBDC on Stellar platform

Bank of America completes its first real-time cross-border payment through USBDC

On September 9, U.S. Bank announced that it has successfully completed a real-time cross-border payment transaction using its own U.S. dollar stablecoin USBDC. The transaction enables the transfer of funds between Bank of America's North American entities and European entities through Stellar's public blockchain network.

Core content and technical architecture of the pilot

This pilot not only verified the USBDC's ability to operate on the Stellar network, but also ensured its seamless connection with the bank's internal financial, risk management and compliance systems. Through Bank of America's digital asset platform, the pilot project comprehensively tested the functions of coin minting, redemption, freezing and recovery.

Although Bank of America disclosed the Stellar issuer address used in the pilot for account monitoring, it did not disclose the transaction amount, settlement time, transaction hash or the reserve structure supporting the token. In addition, the bank has not announced plans to open the USBDC to the public. This distinction is crucial because this pilot mainly demonstrates technical and operational capabilities rather than a comprehensive rollover of commercial-grade stablecoins.

Institutional Application and Control Mechanism

Bank of America positioned the transaction as a test of its internally developed digital asset infrastructure. The USBDC is currently defined as a controlled pilot asset and is strictly controlled by Bank of America. Retail customers, corporate customers or external financial institutions are currently unable to obtain, hold or redeem the USBDC.

The pilot focuses on examining how bank-controlled digital dollars can flow across borders while remaining connected to traditional banking regulatory controls. Bank of America's digital asset platform supports USBDC issuance, transfer and redemption, and specifically tests freezing and recovery capabilities. These control mechanisms allow issuers to restrict transfers or withdrawals of tokens under certain circumstances, helping regulated financial institutions respond to fraud, sanctions, court orders and compliance requirements.

Although the Stellar network supports the control rights of asset creators, Bank of America did not disclose the specific account settings used, whether recovery operations occurred, and how these rights will be governed in a broader deployment. Public blockchains can run around the clock, unlike traditional payment systems that rely on bank working hours and local settlement calendars. Bank of America said the USBDC supports round-the-clock transactions, but did not say whether the pilot will be conducted outside normal business hours, nor did it provide data comparing it with traditional cross-border payment systems in terms of costs, foreign exchange fees or settlement speeds.

Industry Background and Future Outlook

Bank of America said that the USBDC was one of the first banks to issue stablecoins deployed on a public blockchain. The move builds on the bank's partnership with the Stellar Development Foundation, which is evaluating how public blockchain infrastructure can support regulated financial services while retaining institutional control.

In contrast, other companies are expanding the use of tokenized dollars in lending and payments. For example, Coinbase has expanded Morpho-based USDC lending services in Brazil, opening stablecoin access to the public through existing financial platforms. However, unlike widely circulated stablecoins such as the USDC and USDT, which can flow freely on exchanges, payment platforms, wallets and decentralized applications, the USBDC currently only recognizes inter-entity transactions that exist within the same banking organization.

Looking ahead, Bank of America is exploring institutional-level application scenarios such as enhancing liquidity management, collateral liquidity and cross-border treasury operations. This may involve mobilizing funds during non-traditional banking hours or accelerating the flow of tokenized assets between approved counterparties. However, the bank has not provided a timetable for further testing or commercial launch, nor has it identified potential customers, payment corridors or partners.

Subsequent developments may require Bank of America to clarify how the USBDC complies with existing U.S. stablecoin regulations and European payment requirements. Future disclosures need to clarify whether each USBDC is backed by corresponding U.S. dollar deposits or other reserve assets, who has the right to redeem the tokens, where the reserves are kept, and whether the holders are protected by deposit insurance. The current results only confirm that Bank of America's digital asset platform can issue and transfer proprietary tokens through Stellar in a real-time environment, and do not represent the official launch of a public stablecoin. The key indicator for the next step will be whether banks will extend their application beyond associated entities.