Blockchain Technology to Debut for International Money Transfers Through SoFi
SoFi, the Nasdaq-listed digital financial platform, is set to revolutionize international remittances with its new service later this year. The service, powered by Lightspark and its Universal Money Address (UMA) system utilizing the Bitcoin Lightning Network, offers lower fees, faster speed, and enhanced security compared to traditional remittance providers.
Lower Fees and Transparent Pricing
SoFi’s service is designed to have total costs below the global average remittance fee of 6.49%, as reported by the World Bank. It benefits from exemptions such as the 1% remittance tax enacted in the U.S., further reducing costs for users. Fees and exchange rates are fully transparent and shown upfront before transactions, making SoFi among the lowest-cost international transfer platforms available.
Faster Settlements
Traditional remittances typically take 3–5 days to settle, slowed by intermediaries and legacy infrastructure. In contrast, SoFi converts USD to Bitcoin in real-time, routes transfers instantly over the Bitcoin Lightning Network—a layer-2 blockchain solution optimized for fast, secure payments—and converts back to local currencies immediately. This leads to near-instant delivery of funds to recipients' bank accounts, providing much faster settlements than traditional methods.
Enhanced Security
By leveraging blockchain technology and the Bitcoin Lightning Network, SoFi's service ensures secure, transparent, and tamper-resistant transactions. The use of Lightspark’s UMA adds a reliable identification layer, facilitating seamless cross-border payments without requiring third-party intermediaries. SoFi's national bank charter adds institutional regulatory oversight and custody capabilities, which many crypto-native firms lack, giving additional regulatory security and trust.
Initial Launch and Expansion Plans
The initial launch targets the Mexico–U.S. corridor—one of the largest international remittance lanes—with plans to expand globally. SoFi’s integration within its existing app eliminates the need for third-party remittance apps, making the experience smoother for customers.
In summary, SoFi’s blockchain-powered service surpasses traditional remittance providers by offering significantly lower fees, near-instantaneous transfer speeds, and enhanced security through regulated, crypto-backed infrastructure and transparent pricing. This positions SoFi as a disruptive and more inclusive alternative in the global remittance market.
[1] Lightspark: https://lightspark.co/ [2] Bitcoin Lightning Network: https://lightning.network/ [3] Universal Money Address (UMA): https://uma.community/ [4] World Bank Remittances Data: https://remittancespr.worldbank.org/remittances-data.aspx [5] SoFi International Money Transfer Service Announcement: https://sofi.com/newsroom/press-releases/sofi-announces-sofi-international-money-transfer-service-powered-by-lightspark-and-umas-universal-money-address-system
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