The SoFi Bank began settling transactions from its debit and credit cards on the Mastercard network this Tuesday (22) using the stablecoin SoFiUSD. According to the company, it is the first national bank in the United States to put this settlement model into operation on Mastercard's global network.
The change covers a card program expected to move more than US$ 25 billion in annualized volume. The transactions are already being settled on blockchain, six months after SoFi and Mastercard announced the integration.
In practice, customers continue paying normally with their cards. SoFiUSD is used behind the scenes of the financial infrastructure to settle transactions between the institutions involved.
Merchants also don't need to hold stablecoins. Through SoFi's infrastructure, the funds can be converted to dollars and deposited into bank accounts.
SoFi wants to expand use of SoFiUSD
The operation represents the first large-scale application of SoFi's strategy to turn SoFiUSD into payments infrastructure, in addition to an asset available to the bank's customers.
The company said it is already discussing settlement agreements with large merchants in the United States. SoFi and Mastercard are also evaluating expanding the model to international payments, remittances and other forms of money transfer.
The expansion could also reach Galileo customers, SoFi's financial technology platform, allowing other companies and issuing banks to adopt settlement with SoFiUSD.
The stablecoin is issued by SoFi Bank and can be redeemed at a ratio of 1:1 for dollars. Although it is issued by a regulated bank, SoFiUSD is not a bank deposit and does not have FDIC coverage.
