
SoFi Technologies is using blockchain technology to bring cross-border remittance payments to its customers.
The digital bank announced on Tuesday that it is partnering with Lightspark, a payments tech company that builds enterprise blockchain infrastructure for digital currencies, to offer account holders the option to send funds abroad directly from the SoFi mobile app. SoFi initially
As banks are starting to use
SoFi will be one of the first U.S.-based digital banks to offer a blockchain-powered remittance service, according to the company. It joins the ranks of other
SoFi's international money transfer service will convert U.S. dollars to Bitcoin in real time and send the funds using the
As a digital form of currency, crypto transactions fall outside of the scope of Section 4475 and are exempt from the remittance tax requirements.
The law also specifies that funds transferred from "an account held in or by a financial institution" are exempt.
Banks that have an account relationship with their customers are therefore
"[The exemption] eliminated their need to worry about this requirement because most of the wire transfer activity that they do, they're doing with someone or doing on behalf of someone that has an account relationship with them," Ferris told American Banker earlier in August.
"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 in a statement. "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."
The digital bank will be officially launching its remittance service later this year, but it did not specify a release date. SoFi account holders currently have the option to join a waitlist to receive access to self-serve international money transfers through their checking or savings accounts.
"Digital banks are embracing universal money address because it's fast, cheap and secure, and it uses the only open payments network that exists, Bitcoin," said David Marcus, CEO and co-founder of Lightspark. "We're excited to see the demand via SoFi's waitlist, proving that people are ready for the future of payments."
SoFi claimed in a press release that its remittance platform will be "one of the lowest cost platforms to transfer money internationally, with the total costs being below the current national average." According to the
Exact pricing will vary based on the amount being sent and the location of the recipient, according to a SoFi representative, and exchange rates and fees will be displayed up front before a consumer finalizes the transaction.
At launch, SoFi's remittance service will be available in Mexico. The digital bank said it is planning to add additional countries shortly after the official launch in a muti-phase rollout.