SoFi Bank Launches First US Stablecoin Settlement on Mastercard

SoFi Technologies (NASDAQ:SOFI) shares climbed 3% on Tuesday after SoFi Bank announced it is the first nationally chartered US bank to deploy live stablecoin settlement across Mastercard's (NYSE:MA) global payments network. The move marks a shift in how the bank processes transactions for its debit and credit card holders, replacing traditional settlement methods with blockchain-based infrastructure using its proprietary token, SoFiUSD.

The bank is in the process of migrating its entire card programme to this new settlement structure. SoFi projects the arrangement will handle more than $25 billion in annualised payment volume once the transition is complete. This figure represents the total scale of the card programme rather than a count of transactions already settled via SoFiUSD. The launch follows a partnership between the two companies announced in March, which focused on developing stablecoin-based payment solutions.

SoFiUSD is issued by SoFi Bank, N.A., an institution regulated by the Office of the Comptroller of the Currency. The company describes the token as the first stablecoin issued by a nationally chartered bank. It is designed to maintain a one-to-one value with the US dollar and is fully redeemable for cash. Reserves backing the stablecoin consist primarily of cash, ensuring liquidity for redemption requests.

For merchants, SoFi is integrating this technology through its Big Business Banking platform. Businesses can receive settlement proceeds instantly into their SoFi Bank accounts and withdraw funds as cash at any time without incurring withdrawal fees. The system allows merchants to benefit from blockchain-based settlement without needing to hold stablecoins, build their own infrastructure, or alter existing operational workflows. Funds continue to be managed through conventional bank accounts.

SoFi stated it is currently holding discussions with large US merchants regarding the adoption of this settlement method. While the company did not name specific partners, it indicated that potential customers include multinational retailers and technology service platforms. No additional commercial agreements were announced at this time.

Beyond immediate card settlement, SoFi and Mastercard plan to explore other applications for SoFiUSD, such as cross-border payments, remittances, and other money transfer services. These potential uses are distinct from the currently operational card settlement programme. The initiative aims to provide issuers, acquiring banks, and merchants with additional options for managing settlement and liquidity. Further adoption of the system depends on the completion of SoFi's card programme migration and any subsequent commercial deals.