US bank SoFi Technologies has launched crypto trading services to its customers, as clearer rules have allowed the crypto market to court greater interest from traditional finance.
SoFi announced on Tuesday that its crypto service will aim to offer dozens of cryptocurrencies, including Bitcoin (BTC) and Ether (ETH). The service began a phased rollout on Monday, with more customers gaining access in the coming weeks.
SoFi CEO Anthony Noto told CNBC’s Squawk Box on Tuesday that his bank is the first and only nationally chartered bank to launch crypto trading to consumers. This move was spurred by the Office of the Comptroller of the Currency (OCC) easing its stance on how banks can engage with crypto in March.
"One of the holes we’ve had for the last two years was in cryptocurrency, the ability to buy, sell, and hold crypto. We were not allowed to do that as a bank. It was not permissible," Noto stated.
SoFi withdrew from the crypto industry in 2023 as a condition of obtaining a bank charter in a stricter regulatory environment. The bank returned to crypto in June, when it rolled out international payment options, allowing conversions from fiat to crypto and transmission via the blockchain.
Blockchain and Crypto: A "Super Cycle Technology"
SoFi also plans to introduce SoFi USD, a stablecoin backed dollar-for-dollar by reserves, and integrate crypto into its lending and infrastructure services for borrowing and faster payments.
"We believe blockchain and cryptocurrencies are a super cycle technology just like AI, and it will be pervasive across all the financial system," Noto said.
He added that stablecoins would fundamentally change payments, provided they have liquidity and do not carry credit risk or duration risk.
"I actually worry quite significantly about stablecoins from operators that are not banks. Where are the reserves sitting? Is there duration risk for those reserves? Is there credit risk for those reserves? Are those reserves bankruptcy remote?" he questioned.
"That’s three elements that you have to think about with whatever stablecoin you use. Just because it’s back dollar for dollar doesn’t mean those dollars will be there when you try to liquidate."
Members Back Crypto Shift
SoFi has over $41 billion in assets, according to financial metric platform Business Quant. The bank’s third-quarter results list its net revenue as $962 million and show a member base of 12.6 million people.
Noto said 60% of the bank’s members surveyed were interested in crypto investments and also revealed he has allocated 3% of his portfolio to crypto, mainly Bitcoin.
"We have exposure to it because I believe we’re investing in a technology not in a currency. The analogy I use with people is imagine if in 1990 you could have bought a piece of the World Wide Web through some coin called the World Wide Web coin."
"It’s very similar to that. These are networks, communication networks used for payments and other applications," Noto added.