SoFi Rises After Unveiling Bitcoin-Powered Remittance Service
Partnership with Lightspark will leverage the Lightning Network for faster, cheaper international money transfers, hitting shares of rival Western Union.
SoFi Technologies Inc. shares climbed Tuesday after the fintech company announced it was partnering with Lightspark to launch an international money transfer service powered by the Bitcoin Lightning Network, positioning it as one of the first U.S. banks to offer blockchain-enabled remittances.
The new service, expected to launch later this year, aims to provide SoFi members with a method to send funds abroad that is both faster and cheaper than traditional remittance channels. The announcement sent SoFi's stock up as much as 2.7%, while shares of legacy money-transfer giant Western Union fell 1% on the news.
By integrating Lightspark’s technology directly into its app, SoFi will allow users to send U.S. dollars, which are converted into Bitcoin in real-time, routed across the Lightning Network, and then instantly converted back to the recipient's local currency. The company said fees and exchange rates will be displayed upfront.
"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," said Anthony Noto, CEO of SoFi, in a statement. He added that the move unlocks "the value of blockchain technology, to give members faster, smarter, and more inclusive access to their money."
The service will initially focus on the U.S. to Mexico corridor, a major global remittance market, before expanding to other countries. SoFi has opened a waitlist for members to gain early access to the feature through their Checking & Savings accounts when it becomes available.