Mastercard has partnered with SoFi Technologies to allow settlements using SoFiUSD, a dollar-backed stablecoin, across Mastercard's global payments network. This integration enables card issuers and acquirers to settle transactions using a bank-issued digital dollar.
Under the agreement, SoFi Bank N.A. will settle its own Mastercard credit and debit transactions in SoFiUSD. SoFi's platform, Galileo, will provide client banks and card issuers the option to utilize the stablecoin for transaction settlement within Mastercard's network.
SoFiUSD, launched in December, is reportedly the first stablecoin issued by a US nationally chartered and insured deposit bank on a public blockchain. It allows for 24/7 transaction settlements across Mastercard's network. The stablecoin is backed 1:1 by cash reserves and will be supported by Mastercard's Multi-Token Network alongside fiat currencies and other digital assets.
Both companies plan to explore additional use cases, including cross-border remittances, business-to-business transfers, and programmable treasury applications, pending regulatory approval.
This move follows Mastercard's increasing involvement in the stablecoin space, including a prior partnership with Thunes for stablecoin wallet payouts and Mastercard Move. The competitor, Visa, is also expanding its stablecoin settlement and payout infrastructure, testing stablecoin-based cross-border settlement and introducing direct stablecoin payouts for businesses and freelancers.