SoFi has become the first nationally chartered bank to settle card transactions via blockchain on Mastercard's network, the companies announced Tuesday. The San Francisco-based financial firm is routing its entire debit and credit card program—expected to process approximately $25 billion annually—through blockchain-based settlement using SoFiUSD, a stablecoin it began issuing this year.
Transactions began moving through the blockchain as of Tuesday, building on a partnership between SoFi and Mastercard first revealed in March. SoFiUSD is backed primarily by cash reserves and can be redeemed for U.S. dollars on a one-to-one basis. The Office of the Comptroller of the Currency oversees SoFi Bank, N.A., which issues the token. The companies noted that the stablecoin is not a bank deposit and carries no FDIC or SIPC insurance.
Broader Strategy
SoFi CEO Anthony Noto stated that the move enables "businesses faster access to their money via the speed of blockchain, with the safeguards of a bank." The launch represents part of Mastercard's broader initiative to integrate stablecoins into its existing payment infrastructure.
SoFi indicated the launch is a starting point for expansion. The company is in talks with large retailers and technology platforms about adopting similar settlement arrangements and plans to explore additional applications with Mastercard, including cross-border payments and remittances.
