Key Takeaways
SoFi and Mastercard said September 22 that stablecoin settlement is live across SoFi Bank's debit and credit card program.
The full card program, expected to process more than $25 billion a year, now settles in SoFiUSD, the first stablecoin issued by a nationally chartered bank.
The companies plan to explore SoFiUSD for merchant settlement, cross-border payments and remittances next.
A stablecoin issued by a US national bank is now settling real card payments at scale. SoFi Technologies and Mastercard announced September 22 that settlement through SoFiUSD is live across SoFi Bank's debit and credit card program, six months after the two companies unveiled their partnership in March.
SoFi is moving its entire card program, expected to handle more than $25 billion in annualized volume, to blockchain-based settlement. SoFiUSD is issued by SoFi Bank, an OCC-regulated national bank, and is redeemable one-for-one for US dollars, backed mostly by cash reserves. Merchants don't need to hold the token. Through SoFi's Big Business Banking platform they can receive funds in a SoFi account and withdraw cash around the clock at no cost, according to the company.
"Stablecoins become meaningful when they solve real problems that businesses face every day," said Sherri Haymond, Mastercard's global head of digital commercialization. SoFi says it is in talks with large US merchants, from multinational retailers to tech platforms, about stablecoin settlement, and both companies plan to look at cross-border payments and remittances.
The most notable part of this is who issues the dollar token. It is a regulated bank running on existing card rails, the same bank-grade path that earned Bastion conditional approval as a national trust bank and brought stablecoin payments to community banks and credit unions through Coinbase and Moov. SoFi also discloses that SoFiUSD is not a deposit and is not FDIC insured.
People Also Ask
What is SoFiUSD?
SoFiUSD is a payment stablecoin issued by SoFi Bank, an OCC-regulated national bank. It is redeemable one-for-one for US dollars, backed mostly by cash, and is the first stablecoin issued by a nationally chartered bank.
How does stablecoin settlement work for SoFi card payments?
SoFi Bank's card transactions on Mastercard's network now settle in SoFiUSD on a blockchain. Merchants don't need to hold the token and can receive funds in a SoFi Bank account.
Is SoFiUSD FDIC insured?
No. SoFi discloses that SoFiUSD is not a deposit, is not insured by the FDIC or SIPC, and is not bank guaranteed.
What's next for SoFi and Mastercard's stablecoin partnership?
SoFi is in talks with large US merchants about stablecoin settlement, and the companies plan to explore SoFiUSD for cross-border payments and remittances.