SoFi launched a new account offering 4.4% annual interest on cash held for crypto trading. The product provides FDIC insurance up to $250,000. "Too much money in the digital asset ecosystem is sitting idle," said CEO Anthony Noto. This move helps SoFi compete with non-bank firms by offering regulated interest-bearing deposits.
Cash held in a SoFi Earn account will generate 4.4% annual interest and be insured by the Federal Deposit Insurance Corporation, which protects eligible deposits of up to $250,000 per depositor if a bank fails.
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"Too much money in the digital asset ecosystem is sitting idle, leaving massive potential earnings on the table for millions of people," SoFi CEO Anthony Noto told Reuters.
The product moves SoFi into a space historically dominated by non-bank crypto firms. In recent years, funds earmarked for crypto trading were often parked in interest-bearing stablecoins, giving investors a way to earn yield while keeping money ready to deploy.
That model has come under pressure after the GENIUS Act, signed last year, barred stablecoin issuers from paying interest, creating an opening for banks to offer regulated, interest-bearing alternatives through products such as tokenized deposits.
SoFi Earn will also let users buy crypto directly or transfer funds to another platform.
"The primary opportunity is with people who already participate in crypto and want that money to keep working and ready to move," Noto said.
Traditional financial institutions are developing products to tap the crypto market, arguing that bank-issued alternatives offer greater regulatory oversight than stablecoins issued by non-bank entities.
"Over the next year or so, you're going to see an inflection point. It is a big effort to move traditional finance on chain, but I think the economic drivers are just so powerful that it's inevitable," said Sam MacPherson, CEO at digital asset finance firm Spark.
(This story has been corrected to fix the annual percentage yield to 4.4%, from 4.2%, after the company revised the figure, in paragraph 2.)
Reporting by Niket Nishant and Manya Saini in Bengaluru; Editing by Tasim Zahid
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Niket Nishant reports on breaking news and the quarterly earnings of Wall Street's largest banks, card companies, financial technology upstarts and asset managers. He also covers the biggest IPOs on U.S. exchanges, and late-stage venture capital funding alongside news and regulatory developments in the cryptocurrency industry. His writing appears on the finance, business, markets and future of money sections of the website. He did his post-graduation from the Indian Institute of Journalism and New Media (IIJNM) in Bengaluru.
Manya covers the most influential U.S. financial institutions, from Wall Street’s largest banks and card networks to leading asset managers and fintech companies. She also reports on late-stage venture capital fundraises, initial public offerings on U.S. exchanges and regulatory developments shaping the cryptocurrency industry. Her work appears across the finance, markets, business and future of money sections of the Reuters website. She holds a bachelor’s degree in political science from the University of Delhi and a master’s in journalism from the Symbiosis Institute of Media and Communication.