Bank of America has chosen the Stellar network for its USBDC stablecoin. The reasons for this decision include asset freezes, recovery functions, and compliance requirements. Information shared by Tokenicer indicates that this network selection was driven by the operational needs of a regulated bank.

According to Tokenicer, the person in charge of the digital asset business explained this decision during the relevant discussions. Bank of America has moved beyond the proposal stage and has initiated a real cross-border pilot project with USBDC involved, with participants including its entities in the United States and the European Union.

Bank of America chooses Stellar, with compliance being the primary consideration.

Asset freezing and recovery capabilities are one of the reasons why American banks have chosen Stellar for their stablecoins. This decision has also led to Stellar being incorporated into the bank's distributed ledger technology plans.

For regulated banks, the requirements involved in choosing a blockchain network are different from those of many encryption projects targeting retail users. Compliance obligations, as well as the processes for handling disputed transactions and certain security incidents, all influence which network capabilities banks value.

Comments from Tokenicer highlight this difference. Many crypto users view freezing and recovery measures as forms of centralized control; however, banks may assess these functions based on their own operational responsibilities. In this case, the person in charge of the bank's digital assets business listed these control functions, along with compliance requirements, as reasons for choosing Stellar.

According to the post with the ID Tokenicer, Bank of America is one of the largest banks in the United States. This selection has brought a clear institutional use case for Stellar in the technical planning of large banks.

USBDC has carried out real cross-border pilot projects.

The cross-border pilot of USBDC involves entities of American banks in the United States and the European Union. This real-world test indicates that the project has moved beyond the conceptual stage and is ready for practical application, but this in itself does not mean that a broader commercial launch has been confirmed.

When evaluating the relationship between the stablecoin issued by Bank of America based on Stellar and the network's native token, this distinction is also important. USBDC and XLM are two different types of assets: activities on the stablecoin do not automatically create additional demand for XLM.

The specific details of this progress are that Bank of America has simultaneously completed network selection and cross-border testing: Stellar has become part of its distributed ledger plan, and USBDC has also been used in a real pilot between its entities in the United States and the European Union.

This article was generated with the assistance of artificial intelligence and has been reviewed by an editorial team.