SoFi Technologies has selected digital asset custodian BitGo to facilitate the launch of its bank-issued stablecoin. This is a significant milestone in the regulated digital asset sector as federally supervised stablecoins gain traction for use in payments and settlement in financial markets today.
On Thursday, SoFi Technologies and BitGo announced a partnership where BitGo’s technology will support the launch of SoFiUSD, a stablecoin issued by SoFi Bank, a nationally chartered and insured depository institution. BitGo is a digital asset custodian that provides a stablecoin-as-a-service platform.
BitGo’s technology will enable the connection of dollar-backed stablecoin USD to various payment companies, exchanges, and other players in the digital asset sector. This arrangement positions the token for use in various settlement options.
The company said that SoFi USD is a stablecoin issued by a U.S. nationally chartered and insured deposit bank and is the first to operate on a public, permissionless blockchain. It is important to note that this is in line with federal regulatory standards.
The firm is a publicly traded company on Nasdaq and serves nearly 14 million members. It entered the digital asset market in 2019 when it added cryptocurrency trading to its platform. It acquired Golden Pacific Bancorp in 2022 and formed SoFi Bank.
Also Read: SoFi Expands Stablecoin Settlement Through New Mastercard Partnership
The launch of the dollar-backed stablecoin comes after the GENIUS Act was passed into law, which creates a federal framework for payment stablecoins and their issuers.
Recent developments indicate that there has been a wider shift in infrastructure in the payment sector. Modern Treasury has launched a payment service that connects with existing banking infrastructure and allows for the use of stablecoin technology in making payments.
The service allows businesses to make payments using tokens in addition to ACH and wire transfer options. The platform currently supports a variety of dollar-pegged tokens, including USDC, Global Dollar, and Pax Dollar.
Another major development in the sector has been announced by Stablecore, which offers digital asset infrastructure technology to businesses in the sector.
The company has announced that it has become a member of the Jack Henry Fintech Integration Network, giving 1,700 financial institutions access to stablecoin technology.
These developments indicate that the sector has seen tremendous growth in regulated digital settlement technology, with the platform being one of the earliest national bank participants in the sector.
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