SAN FRANCISCO — SoFi Bank has begun using its SoFiUSD stablecoin to settle transactions across its Mastercard debit and credit card programs, SoFi Technologies said Tuesday.
SoFi said it is migrating its $25 billion card program to the new settlement process and that transactions are already being recorded on a blockchain. The company did not specify when the migration would be complete.
The change concerns how payments are settled between financial institutions. SoFi said merchants do not need to hold stablecoins or change their payment systems. Merchants using its Big Business Banking platform can receive settlement funds in a SoFi Bank account and withdraw them as cash around the clock at no cost, according to the company.
SoFiUSD is issued by SoFi Bank, a nationally chartered bank regulated by the Office of the Comptroller of the Currency. SoFi said the stablecoin can be redeemed one-for-one for U.S. dollars and is backed by reserves consisting primarily of cash.
In Just Six Months
“SoFi and Mastercard took stablecoin settlement from an idea to a live product” in six months, SoFi CEO Anthony Noto said in the company’s announcement. Mastercard executive Sherri Haymond said the launch puts stablecoin settlement into a live payment system while retaining the network’s existing safeguards.
The companies announced their partnership in March. SoFi said it is discussing similar settlement arrangements with large U.S. merchants, and the companies plan to explore uses for SoFiUSD in cross-border payments and remittances.
