Institutional experiments on Stellar, combined with fresh privacy upgrades, are reshaping market expectations for XLM ahead of year-end.
Summary
How is Stellar expanding its institutional footprint in 2025?
The Stellar (XLM) network is going through its most active development year in 2025, with a clear push to attract major financial institutions. However, XLM price action has diverged from these strong fundamentals, frustrating many retail traders who expected a closer correlation.
These moves underline Stellar’s growing relevance in cross-border payments and enterprise blockchain use. Moreover, they have revived expectations for an XLM price recovery toward the end of the year, as on-chain activity and institutional interest continue to build.
US Bank, one of the largest commercial banks in the United States, has begun actively testing stablecoin issuance on the Stellar network. This initiative positions Stellar ahead of several rival chains in the race to become the preferred settlement layer for regulated digital assets.
A major traditional financial institution choosing Stellar over Ethereum or other layer-2 solutions is widely seen as a crucial milestone. It suggests the network has reached the level of reliability, compliance tooling, and performance that banks require for live payment flows.
Commenting on the pilot, Mike Villano, Senior Vice President and Head of Digital Asset Products at US Bank, emphasized the need for strong controls. He highlighted know-your-customer protections, the ability to unwind and claw back transactions, and the importance of asset-freeze functions at the protocol level.
Villano noted that one of the advantages discovered during research and development was Stellar’s ability, at its base operating layer, to freeze assets and unwind transactions when necessary. That said, such capabilities are framed as compliance tools for bank-grade deployments rather than features aimed at everyday retail users.
This information spread quickly through the XLM community and strengthened sentiment that US Bank’s experiment could spur other banks to test similar products. Moreover, broader stellar institutional adoption would likely translate into higher network usage, potentially providing long-term support for XLM valuation.
At the same time, AUDD — a 1:1 Australian dollar-backed stablecoin — officially surpassed $1 billion in organic transaction volume on Stellar. The AUDD milestone is particularly notable because it reflects genuine user and business activity rather than wash trading or short-term liquidity farming, which often distort metrics on other chains.
Why are privacy and security upgrades becoming central for Stellar?
The most significant technical advance this year comes with the launch of X-Ray, introduced via Protocol 25. X-Ray lays the groundwork for a new wave of zero-knowledge (ZK) privacy applications that can operate directly on the Stellar network.
This push toward ZK infrastructure aligns closely with current market behavior among large investors. A recent report indicates that institutions are gradually shifting away from public-chain Ethereum toward privacy-focused blockchains that can better protect sensitive financial data.
Stellar’s implementation of these advanced ZK capabilities strengthens its competitive position in the battle for institutional capital. Moreover, the upgrade complements existing compliance features, potentially allowing banks to balance regulatory oversight with transaction confidentiality.
Retail traders have also been rotating attention into zero-knowledge coins such as Zcash (ZEC) and StarkNet (STRK). These altcoins have held up comparatively well despite a broader market correction, suggesting that privacy narratives remain attractive to both institutional and retail segments.
Within this context, the recent stellar zk upgrades are seen as a strategic move. They may help Stellar capture flows from institutions that want programmable privacy without abandoning the public-chain model entirely.
Is XLM holding a decisive technical support zone?
Market analysts point out that XLM is currently trading directly on its strongest identified support zone of 2025. This zone has become the focus of traders who are monitoring whether the asset can stabilize and launch a new uptrend from current levels.
The constructive outlook rests on two main technical signals. First, XLM has repeated the same falling wedge formation twice this year, a pattern often associated with potential bullish reversals once a breakout occurs.
The previous falling wedge on the Stellar (XLM) chart led to a sharp rebound, according to research shared by Elite Crypto. However, technicians warn that chart structures are not guarantees and still depend on broader market sentiment and liquidity conditions.
Second, XLM has flipped its 200-week exponential moving average (EMA) from resistance into support. This long-term moving average now sits near the $0.20 area, indicating strong demand historically emerges around that zone when prices retest it.
Beyond the charts, on-chain data shows increasing interest in Stellar-based decentralized finance. The total value locked (TVL) on Stellar reached a new high of $168.8 million, according to DefiLlama, despite a two-month decline in market price.
This expansion in stellar defi tvl indicates that more capital is being committed to protocols on the network, even as spot valuations lag. Moreover, it reinforces the idea that DeFi usage is becoming a core pillar of Stellar’s evolving ecosystem.
The combination of the US Bank pilot, the AUDD stablecoin volume milestone, and X-Ray’s zero-knowledge infrastructure has led some analysts to frame the current setup as a potential inflection point. In that view, the phrase stellar xlm captures not just a token, but a maturing institutional and DeFi platform.
Could these catalysts support an XLM price recovery into year-end?
Stellar now presents a mix of institutional experimentation, privacy-focused protocol upgrades, and historically strong technical support near the $0.20 handle. However, any sustained XLM price recovery will still depend on broader crypto market conditions and risk appetite.
Even so, the network’s progress in areas like bank-tested stablecoin issuance, AUDD’s $1 billion volume achievement, and rising DeFi participation offers a solid fundamental backdrop. As 2025 advances, investors will watch whether these developments translate into higher transaction volumes, deeper liquidity, and a more resilient price structure.
In summary, Stellar enters the final stretch of the year with growing institutional engagement, fresh ZK tooling, and strengthening on-chain metrics, all of which support a cautiously optimistic outlook for XLM.
