SoFi Ties Up with Mastercard for Blockchain-Based Settlement Rails

SoFi has begun settling debit and credit card transactions with Mastercard using its SoFiUSD stablecoin, as part of a move to migrate its entire card program to blockchain-based settlement rails.

The bank expects to process over $25 billion in annualized volume through this new system, which does not eliminate intermediaries such as Visa or banks from the card settlement process.

Visa is also moving towards onchain settlement, having reached a $7 billion annualized run rate with its stablecoin settlement pilot in April.

Experts say that stablecoins could become a major part of payments without businesses or consumers necessarily interacting with them directly.

While faster settlement can reduce delays and capital needs for cross-border payments, it may not necessarily translate into cheaper end-to-end payments due to conversion and compliance costs.