SoFi Turns to Tokenized Deposits to Strengthen Its Core Lending Business

Two digital dollars: Last week, U.S. digital bank SoFi launched SoFi Earn (SOFIE), a tokenized deposit paying a variable 4.40% APY with FDIC insurance up to applicable limits. Together with its SoFiUSD stablecoin, SoFi is now the first U.S. national bank to offer retail customers both instruments.

• Why it matters: Banks have largely developed tokenized deposits for institutional payments, from JPMorgan’s JPMD to Europe’s CBMT initiative. SoFi is taking a different approach, bringing tokenized deposits to consumer savings. The strategy also resembles that of crypto exchanges: Coinbase offers USDC rewards and onchain lending, while Kraken pays rewards on idle stablecoin balances. But rather than relying on stablecoin rewards or crypto lending, SoFi is offering an insured bank deposit.

How it works: Each SOFIE token represents a $1 deposit at SoFi Bank and sits inside SoFi Crypto, the bank’s in-app trading product. Customers can redeem it to a SoFi bank account or convert it 1:1 into SoFiUSD to buy crypto or move money onchain. Once converted, the funds leave the deposit, lose FDIC protection and stop earning interest.

• Why tokenize? Until conversion, SOFIE works more like a crypto-adjacent savings account than a transferable digital dollar. The token cannot move to external wallets, other customers or DeFi applications, and SoFi’s internal records, not the blockchain, determine ownership. A conventional savings account with stablecoin conversion could currently offer the same features.

Second attempt: SOFIE is SoFi’s fifth crypto launch in about a year and part of its second run at the business. SoFi first offered crypto trading from 2019 until December 2023, when its bank charter forced it to comply with bank holding company rules. It returned after the OCC cleared national banks for crypto custody and trading in 2025.

SoFi’s crypto launches, 2019 to 2026

Built on SoFiUSD: Most of what SoFi has launched since its return runs on SoFiUSD. SoFi Crypto settles trades in the stablecoin. Big Business Banking, SoFi’s platform that gives companies fiat and crypto accounts in one place, uses it for 24/7 money movement. Since September, SoFi’s card program has also been migrating to SoFiUSD settlement on Mastercard, and SoFi plans to offer the same setup to other card issuers via its Galileo platform.

Yield for idle dollars: SoFiUSD, however, cannot pay interest. From January 18, 2027, the GENIUS Act will bar payment stablecoin issuers from paying holders yield solely for holding the coin, while tokenized deposits fall outside that ban. With SOFIE, the U.S. bank can pay its crypto users interest on dollars they hold, while SoFiUSD covers payments and transfers.

The bigger prize: Every dollar a customer holds in SOFIE is a deposit that can fund SoFi’s loans. Lending produced $807 million in Q3, nearly 60% of SoFi’s $1.37 billion in adjusted net revenue. SoFi now draws about 90% of its funding from deposits and estimates that this shift has cut its funding costs by $745 million a year compared to warehouse financing.

A familiar playbook: Winning those deposits with above-market rates is a long-standing SoFi strategy. SOFIE’s 4.40% exceeds both the 3.30% SoFi pays on qualifying savings accounts and its average deposit funding cost of 3.07% in Q3. CEO Anthony Noto frames the higher rate as an acquisition cost.

• “We use the interest rate for customer acquisition to replace the cost of physical locations, to replace the cost of human beings, and it’s a great return for us,” Noto said on SoFi’s Q3 earnings call.

Outlook: That return depends on SOFIE attracting new money; savers who simply move existing balances into it would only cost SoFi more. That new money would have to come from crypto users, and SoFi still has relatively few of them. At the end of Q3, it counted 503,000 crypto accounts, about 3% of members, which generated $1.6 million in net transaction revenue. Noto describes crypto as a business with “higher growth and earlier-stage revenue,” and SoFi is now counting on it to grow its deposit base as well.

Borja Neira works on tokenized financial products and market structure at Tempo, the payments-focused blockchain backed by Stripe and Paradigm.

What’s the strategic rationale for SoFi’s tokenized deposit and stablecoin offering, and will other banks follow?

SoFi’s move makes sense when you consider its business model. Consumer lending remains a major revenue driver, and stable deposits help fund those loans. As stablecoins gain adoption, banks risk losing customer deposits or seeing their funding become less predictable. Tokenized deposits offer a potential response.

By linking its interest-bearing tokenized deposits with SoFiUSD, SoFi gives customers an easy way to move between earning yield and using stablecoins for payments, around the clock. This could attract stablecoin holders into SoFi’s deposit base, strengthen its funding position, and ultimately support more lending and interest income. The opportunity becomes more significant as stablecoin adoption grows.

I expect smaller, lending-focused banks and digital banks to explore similar models first. They have strong incentives to attract deposits and can often move faster than larger incumbents. Revolut and Nubank, which are also expanding their stablecoin offerings, are potential candidates.

Larger universal banks may take longer. Many still favor closed tokenized deposit networks and view public stablecoins as a threat to their deposit base. I believe they will eventually recognize the opportunity, but first they need to embrace stablecoins as part of their banking models.