SoFi tie-up shows stablecoins can provide alternative blockchain settlement rail
SoFi dives deeper into payments as it moves its entire card program to blockchain-based settlement using its SoFiUSD stablecoin, with more than $25 billion in expected annualized volume.
SoFi has expanded its card program to blockchain-based settlement using its own stablecoin called SoFiUSD, with an anticipated annualized volume of more than $25 billion. Stablecoins are increasingly utilized to settle payments on card networks, allowing for continuous transactions. However, this does not displace Visa, Mastercard, or banks from the process; instead, it introduces a new blockchain-based settlement rail.
SoFi is migrating its entire card program to this system, but customers will continue using their debit and credit cards as usual. This shift enables faster transaction settlement, which is largely invisible to the consumer. Visa is also exploring blockchain-based settlements, with its stablecoin pilot achieving a $7 billion annualized run rate and expanding to support nine blockchains.
Payments experts suggest that while stablecoins could enhance payment efficiency, they do not necessarily eliminate intermediaries like banks. Conversion, compliance, integration, and management costs of stablecoins must also be considered, and their economic benefits may not be fully realized until proven at scale.
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