SoFi Technologies or simply SoFi is an American personal finance and financial technology company with nearly $500 million in net income, annually.
SoFi is publicly traded and has a market capitalization of $26.97 billion.
SoFi has diverse products and services and has been operating since 2011. Recent reports highlight SoFi’s plans to significantly improve its remittance service with Lightspark’s Bitcoin Lightning integration, a move the company says will bring international money transfer costs to below current national averages.
Digital bank SoFi Technologies is set to become the first US bank to leverage the Bitcoin network and Universal Money Address, allowing Americans, Mexicans and others to send money through the Lightning Network.
SoFi has partnered with Bitcoin payments infrastructure Lightspark to launch its blockchain-powered international money transfer service, which will go live later this year, starting in Mexico, SoFi said in an announcement on Tuesday.
“For many SoFi members who regularly send money to loved ones internationally, the ability to quickly transfer money at low cost isn’t just a convenience, it’s a meaningful improvement to their everyday financial lives,” SoFi CEO Anthony Noto said on X. – Cointelegraph report
One thing to note:
-The average global remittance cost is about 6.49%, according to the World Bank and for regular banks, this cost sometimes exceeds 12%.
This means that for every $100,000 remitted, you'd pay $6,490 - $12,000 in fees. Clearly that is insane.
These are some of the outrageous bank charges that lead many to turn to stablecoins and altcoins for sending money globally. This is also why many have speculated for years that crypto will end the banking system’s exploit on money transfers.
By integrating with the lightning network, SoFi would significantly reduce costs to compete in the over $740 billion market.
What's to be expected is that crypto payments solutions are going to bring money transfers to a single layer. Of course, this doesn't mean that one network, chain, protocol or service will rule them all, but rather that money transfers will migrate on-chain, eliminating the concept of “internal and international transactions” — it will all simply be transactions, powered by peer-to-peer tech.
This, in itself will unify the markets, making centralized competitors, whether those in payments frontend solutions or those providing infrastructures, keep fees low because the alternative is simply losing users.
That said, lightning adoption, some say have stalled and others say has failed. Whether or not it succeeds doesn't really matter. This is a Bitcoin specific product and is as a result limited by Bitcoin itself. Just as SoFi Technologies is integrating with the lightning network, we'll have several companies integrate with different crypto payments solutions to give their users cheaper alternatives to money transfers.
In case you missed it
Wyoming announced the mainnet launch of the Frontier Stable Token (FRNT) stablecoin and I covered its impact on the banks.
The focus was on a fresh perspective on what could result from the transition to blockchain-based monetary systems.
Thank you for reading!