Neobank SoFi is tapping Bitcoin Lightning service Lightspark for parts of its upcoming international money transfer service, according to an announcement on Tuesday. The app will enable users to send funds abroad directly from the SoFi app, offering lower fees and faster delivery than typically associated with remittances.
Lightspark, the Bitcoin Lightning project led by former Facebook blockchain lead David Marcus, with provide its Universal Money Address protocol to enable seamless transactions across the open Lightning BTC payments network.
According to the announcement, this makes SoFi one of the first U.S. banks to offer a blockchain-powered remittances service. The move comes at a time when major institutions — from Bank of America to JPMorgan Chase look to blockchain as a potential solution for intra- and internal transfers.
SoFi’s service is expected to roll out next year and will be accessible directly on the SoFi app. It will be available first in Mexico, with additional countries to follow.
“By embedding this directly into SoFi’s app, we’re unlocking the value of blockchain technology, to give members faster, smarter, and more inclusive access to their money,” SoFi CEO Anthony Noto said in a statement.
Similar to Stripe’s initial payments architecture, SoFi’s international money transfer service will convert U.S. dollars to Bitcoin, which will then find the path of least resistance across the Lightning network, before being instantaneously reconverted into a local currency and deposited into the ultimate recipient’s bank account. The announcement notes Lightspark boasts a “global network of partner banks and financial platforms.”
This is not SoFi’s first foray into crypto. In 2019, the neobank introduced crypto trading — a service that was later curtailed following the regulatory backlash amid the FTX collapse. The firm has since signaled it intends to reenter the sector, including offering staking and borrowing services.
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