SoFi and Lightspark Team on Blockchain Remittances

Personal finance company SoFi is set to debut an international money transfer service.

This service, the company announced Tuesday (Aug. 19), will operate directly from the SoFi app in partnership with crypto infrastructure provider Lightspark.

According to a news release, Lightspark will enable the transfers via Universal Money Address (UMA), “to send and receive money seamlessly, with access to an open global network for payments,” and making SoFi “one of the first US-banks to offer a blockchain-powered remittances service.”

David Marcus, Lightspark’s co-founder and CEO, argued that digital banks have begun embracing UMA because of its speed, cost and security, and because it uses bitcoin, which he called “the only open payments network that exists.”

“UMA on SoFi means customers can move dollars instantly, any time, globally, and we’re excited to see the demand via SoFi’s waitlist, proving that people are ready for the future of payments,” Marcus said.

SoFi said the international money transfer service will launch later this year, with costs the company says will be lower than the current national average.

“While traditional banks tiptoe around blockchain, SoFi is sprinting into the space,” PYMNTS wrote last month as the company released its quarterly earnings.

In addition to this new money transfer service, that report said, the company is also reentering “cryptocurrency trading, a service it previously paused amid regulatory headwinds. Now, with a federal bank license in hand and new regulations under the GENIUS Act opening the door, SoFi said it has a structural advantage over pure-play crypto platforms,” PYMNTS wrote.

During SoFi’s earnings call, CEO Anthony Noto previewed plans that included stablecoin issuance, crypto-backed loans and staking infrastructure for other financial institutions. SoFi is already hiring engineering talent and “positioning itself as a key player in financial Web3,” the report added.

Writing about the remittance sector earlier this year, PYMNTS argued that these payments are “one of the clearest use cases where stablecoins promise efficiency gains.”

Global remittance flows came to $669 billion in 2023, with developing countries seeing the bulk, per World Bank data. Traditional transfers often come with fees of up to 6% of the principal and can take numerous days to settle, especially when routed through multiple intermediaries.

“The appeal is straightforward: 24/7 transfer availability, transactions settled in minutes, and an effective ‘digital dollar’ hedge against local currency volatility,” the report added.

“Yet the more stablecoins resemble mainstream payments, the more they inherit mainstream risks. The Financial Action Task Force (FATF), the intergovernmental watchdog for money laundering and terrorist financing, has warned that inconsistent compliance among wallet providers and exchanges could allow stablecoins to become a channel for illicit finance.”