US fintech company SoFi Technologies announced on October 22 the launch of SoFi Earn, or SOFIE, a tokenized deposit product for individual customers. The product allows customers to hold money intended for digital asset trading in an interest-bearing bank deposit and convert it into a stablecoin when needed. It will be rolled out to SoFi Crypto users through November.
Each SOFIE represents USD 1 deposited at SoFi Bank. It is a tokenized representation of a deposit that the bank owes to the customer and is different from a payment stablecoin. As of October 20, the annual percentage yield was 4.40%. The rate is variable and may change at the bank's discretion. There is no minimum balance requirement.
Users can convert SOFIE one for one into SoFi's US dollar stablecoin, SoFiUSD, or SOFID, to purchase digital assets in the app or send funds to supported external wallets around the clock. SOFIE itself remains within SoFi, while external transfers are made using the converted SoFiUSD. Amounts converted into SoFiUSD no longer receive SOFIE deposit interest or deposit insurance.
SOFIE is eligible for deposit insurance, but it shares the insurance limit with a customer's existing SoFi Bank deposits. Checking, savings and SOFIE balances held in the same individual ownership category are protected up to a combined total of USD 250,000 per person.