SoFi Plans to Launch Blockchain-Backed International Money Transfers

By Dean Seal

SoFi Technologies plans to launch an international money transfer service on its app later this year that will use blockchain technology to reduce fees and speed up deliveries.

The San Francisco financial-technology company has teamed with the payments company Lightspark to offer the service using Universal Money Address, Lightspark's open-source protocol that allows users to send and receive money on the Bitcoin Lightning Network.

The service, which will first roll out in Mexico before expanding to other countries, is an early example of how blockchain technology will transform payments in the future, Chief Executive Anthony Noto said.

"Blockchain is going to really drive disruption of the current payment processes," Noto said. "This is sort of day one."

Users of the service would be able to transfer money internationally at costs that are lower than the current national average, according to SoFi.

Sent funds would be converted from U.S. dollars to bitcoin, routed across borders and then instantly converted back into the recipient's local currency before being delivered directly to the recipient's bank account. Exchange rates and fees would be displayed before users press "send."

Before partnering with Lightspark, SoFi had been building its payments infrastructure through Galileo, a payments processor it acquired in 2020 for $1.2 billion, according to Noto.

But the CEO said he has known Lightspark Chief David Marcus for years and had been talking with the former PayPal executive about a potential partnership since Marcus was at Meta Platforms, where he led the company's heavily scrutinized cryptocurrency initiatives before resigning in 2021. Marcus co-founded Lightspark the following year.

Partnering with Lightspark is just the beginning of SoFi's blockchain ambitions, Noto said. For example, stablecoins would allow for seamless domestic money transfers, while tokenization could increase access to loans, he said.

"Blockchain and cryptocurrency technologies will touch every part of our business and it will help make our product better in every way," the CEO said.

Write to Dean Seal at dean.seal@wsj.com