SoFi Bank’s dollar stablecoin went live on Polygon on November 12. Members can use SoFiUSD inside the SoFi app, and businesses using Polygon’s payments infrastructure can choose it to settle dollar payments.
Members can buy, sell, hold and convert SoFiUSD on Polygon without setting up a separate crypto wallet, according to Polygon Labs. The issuer of the dollar stablecoin remains SoFi Bank, N.A., a nationally chartered US bank supervised by the Office of the Comptroller of the Currency.
What changes for SoFi members?
SoFi introduced SoFiUSD in its app on May 27 with support for Ethereum and Solana. Polygon Labs put SoFi’s total membership at more than 17 million. Neither company disclosed how many people used the token on Polygon or how much they transferred.
For members sending tokens to a wallet outside the app, SoFi’s product page still names Ethereum and Solana addresses for direct withdrawals. Polygon Labs confirmed the in-app functions on its network. Its announcement gives no Polygon withdrawal limit, list of eligible countries or fee schedule for international transfers.
Polygon’s November 12 announcement about SoFiUSD
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How does SoFi Bank back its token?
SoFi Bank says it redeems each token, which trades under the symbol SOFID, for one US dollar and holds cash or highly liquid cash equivalents to back it. SoFiUSD carries no deposit insurance, SIPC protection or bank guarantee. The bank also cautions that blockchain transfers are generally irreversible.
SoFi offers a separate product for eligible members who want to earn interest. The SoFi Earn token, SOFIE, represents a dollar deposit at the bank. SoFi advertises a variable 4.40% annual percentage yield on the deposit. FDIC insurance covers the deposit subject to the usual limits and conditions. A SoFiUSD balance on Polygon earns no deposit interest.
The bank’s September 30 reserve report listed 323,542,166 redeemable SoFiUSD in circulation and $330,816,931 in cash. To calculate circulation, the bank subtracted 7,117,150 tokens it held itself and another 157,615 held as SOFIE tokenized deposits from total supply. The reported cash exceeded the dollar value of redeemable tokens in circulation by $7,274,765.
| Where the cash was held | US dollars |
|---|---|
| The bank’s Federal Reserve account | 308,147,219 |
| Fiduciary account established by BitGo for the bank’s benefit | 22,669,712 |
| Total cash reserves | 330,816,931 |
In its October 30 opinion, Deloitte & Touche found that management’s statement about the reserves met the report’s criteria in all material respects as of September 30. The reserve attestation covered that date and did not assess how well the bank’s internal controls worked. The bank also reported eight tokens issued on Canton, in addition to tokens on Ethereum and Solana. It had named only Ethereum and Solana as options for app customers in May.
How can businesses use SoFiUSD on Polygon?
Businesses settling on Polygon can use SoFiUSD alongside USDC, USDT and PayPal USD. Through the Open Money Stack, a business can provide wallets, convert between local currency and tokens, route funds across networks and settle payments onchain. Polygon Labs CEO Marc Boiron said giving SoFi’s banking customers access to Polygon’s payment tools could make digital dollars more useful to consumers and businesses.
A marketplace paying its sellers on a schedule, for example, can choose the recipients, budget and payment window in advance. With the payout tool Polygon introduced on October 12, the wallet checks each request against those rules. Polygon’s 41-second demonstration from that day covers the payout tool. The company did not report the fee or completion time for an actual customer payment in SoFiUSD.
