SoFi Bank Partners with Lightspark to Offer Low-Cost Cross-Border Payments via Bitcoin Lightning Network

SoFi Bank will use Bitcoin's Lightning Network to launch low-cost international money transfers, starting with Mexico later this year. The service, powered by Lightspark's Universal Money Address, allows users to send dollars abroad with real-time Bitcoin conversion. The rollout will mark the first time a US bank integrates blockchain-based remittance capabilities directly into its core banking app.

SoFi Technologies, a digital bank, is set to become the first US bank to integrate the Bitcoin Lightning Network for international money transfers, starting with Mexico later this year. This innovative move aims to offer users a faster, cheaper, and more transparent way to send money abroad.

The service, powered by Lightspark's Universal Money Address (UMA) technology, will allow users to convert US dollars into Bitcoin in real-time and route funds across borders via the Bitcoin Lightning Network. The funds will be delivered directly to the recipient's bank account in their local currency [1].

The partnership between SoFi and Lightspark is a significant step towards utilizing blockchain technology to improve users' financial lives. SoFi CEO Anthony Noto emphasized the importance of efficient and inexpensive international remittances for many users. "For many SoFi members who regularly send money to loved ones internationally, the ability to quickly transfer money at low cost isn't just a convenience, it’s a meaningful improvement to their everyday financial lives," Noto said [2].

Lightspark's UMA allows users to transfer money using an email-like address while leveraging the Bitcoin Lightning Network. The firm was founded in 2022 by David Marcus, former president of PayPal. SoFi expects costs to be "below the current national average," with exchange rates and fees shown to members before hitting send to ensure full transparency [1].

The service will be available 24/7 within the SoFi app and does not require external services or third-party applications. It marks the first time a US bank integrates blockchain-based remittance capabilities directly into its core banking app. The rollout will start in Mexico and expand to new markets in a phased manner [2].

This development comes as SoFi restarts its crypto services after a 2-year regulatory pause. The company has been working on crypto products since 2023 but paused all plans due to regulatory uncertainty in the US. The new crypto-friendly regulations have allowed SoFi to relaunch its crypto trading services and integrate more crypto solutions for its users [3].

The global remittance market, valued at around $740.5 billion in 2024, is a crowded space. SoFi's new service aims to compete in this market by offering faster and cheaper international transfers. The integration of the Bitcoin Lightning Network and UMA technology is expected to lower costs and speed up delivery, providing a transparent experience for users [1].

References:

[1] https://cointelegraph.com/news/sofi-set-first-us-bank-leveraging-bitcoin-lightning
[2] https://www.coinspeaker.com/sofi-technologies-adopts-bitcoin-lightning-network-for-cross-border-payments/
[3] https://www.tradingview.com/news/cointelegraph:878a47efe094b:0-sofi-to-become-first-us-bank-to-integrate-bitcoin-lightning-uma/