US Bank SoFi Technologies Ventures into Crypto Trading
SoFi Technologies, a US-based bank, has announced the launch of crypto trading services for its customers, marking a significant milestone in the growing intersection of traditional finance and cryptocurrency. The move comes as clearer regulatory guidelines have paved the way for greater involvement of traditional financial institutions in the crypto market. SoFi’s crypto service will offer dozens of cryptocurrencies, including Bitcoin (BTC) and Ether (ETH), with a phased rollout that began on Monday and will continue over the coming weeks.
According to SoFi CEO Anthony Noto, the bank is the first and only nationally chartered bank to launch crypto trading to consumers. This development was made possible after the Office of the Comptroller of the Currency (OCC) eased its stance on how banks can engage with crypto in March. Noto emphasized that the bank’s ability to offer crypto services was previously restricted, stating, “One of the holes we’ve had for the last two years was in cryptocurrency, the ability to buy, sell, and hold crypto. We were not allowed to do that as a bank. It was not permissible.”
SoFi had previously withdrawn from the crypto industry in 2023 as a condition of obtaining a bank charter, but it has now returned to the space. In June, the bank rolled out international payment options, allowing conversions from fiat to crypto and transmission via the blockchain. This move demonstrates SoFi’s commitment to embracing blockchain technology and its potential applications.
Blockchain and Crypto: A “Super Cycle Technology”
SoFi plans to introduce SoFi USD, a stablecoin backed dollar-for-dollar by reserves, and integrate crypto into its lending and infrastructure services for borrowing and faster payments. Noto expressed his enthusiasm for the potential of blockchain and cryptocurrencies, stating, “We believe blockchain and cryptocurrencies are a super cycle technology just like AI, and it will be pervasive across all the financial system.” He also highlighted the potential of stablecoins to fundamentally change payments, provided they have liquidity and don’t carry credit risk or duration risk.
Noto also emphasized the importance of considering the reserves backing stablecoins, stating, “I actually worry quite significantly about stablecoins from operators that are not banks. Where are the reserves sitting? Is there duration risk for those reserves? Is there credit risk for those reserves? Are those reserves bankruptcy remote?” He stressed that these factors are crucial when evaluating the reliability of a stablecoin.
Member Support for Crypto Shift
SoFi has over $41 billion in assets, according to financial metric platform Business Quant, and a member base of 12.6 million people. Noto revealed that 60% of the bank’s members surveyed were interested in crypto investments, demonstrating a strong demand for these services. He also shared that he has allocated 3% of his portfolio to crypto, mainly Bitcoin, stating, “We have exposure to it because I believe we’re investing in a technology not in a currency.”
Noto drew an analogy between investing in crypto and the early days of the internet, saying, “Imagine if in 1990 you could have bought a piece of the World Wide Web through some coin called the World Wide Web coin.” He views blockchain and cryptocurrencies as networks and communication systems used for payments and other applications, highlighting their potential for widespread adoption.
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