SoFi’s interest-bearing deposit token lets crypto customers keep funds in a bank deposit, but holders must exchange it for a transferable crypto asset before sending value over blockchain networks.
SoFi Earn (SOFIE) cannot be sent directly over blockchain networks. Holders can swap it for SoFiUSD (SOFID) at a 1:1 rate, then use the stablecoin for in-app crypto purchases or send it to wallets SoFi supports. After conversion, the balance no longer earns interest or has federal deposit insurance.
SoFi links each SOFIE unit to a $1 deposit at SoFi Bank. SOFIE’s variable annual percentage yield (APY) was 4.40% as of Oct. 20, and balances may qualify for Federal Deposit Insurance Corp. (FDIC) coverage under applicable rules. The $250,000 cap applies separately to each depositor at an insured bank; ownership category also affects coverage.
SoFi introduced the SoFi Earn name in an Oct. 22 announcement, after its earlier launch of tokenized deposits for crypto customers.
Varun Datta, founder and CEO of Truth Ventures, said yield, deposit protections and existing customer relationships may help banks compete with stablecoin providers. Datta said payment adoption would hinge on transaction costs, reliable transfers and useful ways to spend the balance.
SoFi said its rollout for SoFi Crypto members will stay underway through November.
