The Stellar (XLM) network is experiencing its most active year of development in 2025, with a strong focus on attracting major financial institutions. However, XLM price performance has moved in the opposite direction despite solid fundamentals.
These developments highlight Stellar’s growing presence in cross-border payments. They also fuel expectations of a strong XLM price recovery toward the end of the year.
Stellar Expands Institutional Reach
US Bank — one of the largest commercial banks in the United States — has begun actively testing stablecoin issuance on the Stellar network.
A major traditional financial institution choosing Stellar over Ethereum or other layer-2 solutions signals a crucial milestone. It suggests that the network has reached the level of reliability and performance required by banks.
“For bank customers, we have to think about other protections around know your customers, the ability to unwind transactions, the ability to clawback transactions, and one of the great things about the Stellar platform as we did some more research and development on it was learning that they have the ability at their base operating layer to freeze assets and unwind transactions.”— Mike Villano, Senior Vice President, Head of Digital Asset Products, US Bank, said.
This information spread rapidly through the XLM community, boosting confidence that US Bank’s move could encourage other banks to follow suit. Greater institutional adoption may support network usage and strengthen XLM pricing.
At the same time, AUDD — a 1:1 Australian dollar-backed stablecoin — officially surpassed $1 billion in organic transaction volume on Stellar. The milestone is notable because it reflects actual user and business activity, rather than wash trading or liquidity farming, which is often seen in other crypto projects.
Stellar Prioritizes Security as Institutional Privacy Needs Grow
The most significant technical advancement comes with the launch of X-Ray, part of Protocol 25, which introduces infrastructure for zero-knowledge-based privacy applications.
This development aligns with current market behavior. A report from BeInCrypto indicates that institutions are gradually shifting away from public-chain Ethereum toward privacy-focused blockchains.
Stellar’s implementation of advanced ZK technology strengthens its competitive advantage in the race for institutional capital.
Retail investors have also been shifting attention toward Zero-Knowledge (ZK) coins such as Zcash (ZEC) and StarkNet (STRK). These altcoins have performed well despite a broader market correction.
XLM Trades at the Most Critical Support Level of the Year
Analysts note that XLM is currently positioned directly on its strongest support zone of 2025.
This outlook is based on two key factors. First, XLM has repeated the same falling wedge structure twice this year. The previous pattern led to a sharp rebound.
Stellar (XLM) Falling Wedge Structure. Source: Elite Crypto
Second, XLM has flipped the 200-week EMA from resistance into support. This moving average points to strong demand near the $0.20 zone.
Beyond technical indicators, on-chain metrics signal rising XLM demand in DeFi. The total value locked (TVL) on Stellar has reached a new high of $168.8 million, despite a two-month decline in prices.
Stellar Total Value Locked. Source: DefiLlama
The combination of institutional developments, privacy-focused upgrades, and strong technical support provides a basis for investors to anticipate an XLM recovery as the year comes to a close.
