SoFi Becomes First US Bank to Integrate Bitcoin Lightning Network for International Transfers

TLDR

• SoFi Technologies will become the first US bank to integrate Bitcoin Lightning Network for international money transfers
• Partnership with Lightspark will launch blockchain-powered remittance service starting in Mexico later this year
• Service converts USD to Bitcoin, routes through Lightning Network, then converts to local currency for recipients
• SoFi competes in the $740 billion global remittance market with lower costs and 24/7 availability
• Company previously offered crypto trading in 2019 but scaled back after FTX collapse

Digital bank SoFi Technologies announced a partnership with Bitcoin payments infrastructure company Lightspark on Tuesday. The collaboration will make SoFi the first US bank to offer international money transfers using Bitcoin’s Lightning Network.

The new service will launch later this year, starting with Mexico. SoFi’s 11.7 million members will be able to send money internationally directly through the SoFi mobile app.

SoFi CEO Anthony Noto explained the service addresses a real need for customers. Many SoFi members regularly send money to family abroad and need quick, low-cost transfer options.

The partnership targets the global remittance market, which reached $740.5 billion in 2024. Traditional money transfer services often charge high fees and take several days to process.

How the Bitcoin Lightning Service Works

The new system will convert US dollars to Bitcoin in real-time when users initiate transfers. The Bitcoin then travels across the Lightning Network to reach the destination country.

Once the Bitcoin arrives, it gets converted back into the recipient’s local currency. The money is then deposited directly into the recipient’s bank account.

Lightspark’s Universal Money Address protocol enables this process. Users can send money using email-like addresses while the Bitcoin Lightning Network handles the actual transfer.

The service promises costs “below the current national average” for international transfers. SoFi will show exact exchange rates and fees before users confirm transactions.

SoFi’s Previous Crypto Experience

This marks SoFi’s return to cryptocurrency services after a previous attempt. The company launched crypto trading in 2019 but scaled back the offering after regulatory challenges.

The regulatory backlash intensified following the FTX exchange collapse in late 2022. Many financial companies reduced their crypto offerings during this period.

SoFi has since indicated plans to re-enter the cryptocurrency sector. The company has mentioned potential staking and borrowing services for the future.

Lightspark was founded in 2022 by David Marcus, the former president of PayPal. Marcus also previously led Facebook’s blockchain initiatives before joining Lightspark.

Growing Adoption of Lightning Infrastructure

Coinbase integrated Lightspark’s Bitcoin Lightning solution in April 2024. The exchange reported strong adoption, with 15% of Bitcoin transactions moving through Lightning rails within the first year.

Brazilian neobank Nubank also partnered with Lightspark in June 2024. However, Nubank has not yet confirmed full integration of Bitcoin-powered payments for its 100 million Latin American customers.

The Lightning Network offers faster transaction times and lower fees compared to regular Bitcoin transactions. This makes it more suitable for everyday payments and remittances.

SoFi’s service will operate 24 hours a day, seven days a week. This provides more flexibility than traditional bank transfer services that often have limited operating hours.

The announcement positions SoFi among the first major US banks to offer blockchain-powered remittance services. Other major institutions like Bank of America and JPMorgan Chase are also exploring blockchain solutions for transfers.

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