BitGo Bank & Trust (NYSE: BTGO), a United States-based digital asset trust bank, has been selected to provide stablecoin infrastructure services and support distribution for SoFiUSD, a U.S. dollar-pegged stablecoin issued by SoFi Bank.
On March 5, BitGo announced that its ‘stablecoin-as-a-service platform’ would provide the technology and operational infrastructure to support SoFi Bank’s issuance of SoFiUSD.
BitGo Bank & Trust—a subsidiary of digital asset infrastructure company BitGo Holdings—said it would also collaborate with select payments providers, market participants, and exchanges to help expand institutional access to and integration of SoFiUSD across the digital asset ecosystem.
“Our Stablecoin-as-a-Service offering was designed for forward-thinking institutions that require cutting-edge technology paired with BitGo’s longstanding foundation of trust,” said Mike Belshe, CEO and Co-founder of BitGo. “SoFiUSD represents the convergence of compliant banking and blockchain efficiency. We are proud to provide the infrastructure that enables SoFi to issue a stablecoin that’s safe, reliable, and ready to scale.”
BitGo Bank & Trust has been regulated by the U.S. Treasury Department’s Office of the Comptroller of the Currency (OCC) since it received approval from the latter last December. The OCC approved four other applications at the same time: Circle’s (NASDAQ: CRCL) First National Digital Currency Bank, Ripple Labs’ Ripple National Trust Bank, Fidelity Digital Assets, and Paxos Trust Company.
The new diplomas allowed BitGo, Circle, Paxos, and Ripple, all of which issue stablecoins—USDS, USDC, and others; PYUSD and others; and RLUSD, respectively—to custody their own assets rather than relying on other OCC-approved entities.
BitGo also provides these and other stablecoin-related services for third-party companies, such as SoFi Bank, a nationally chartered online bank and a technology provider to financial institutions.
For its part, SoFi Bank said its SoFiUSD stablecoin is fully reserved and redeemable one-to-one for U.S. dollars, describing it as the first stablecoin offered by a U.S. nationally chartered and insured deposit bank on a public, permissionless blockchain.
“We’re thrilled to expand institutional access to SoFiUSD through BitGo,” said Simon Griffin, Business Lead for Crypto Distribution at SoFi. “This isn’t just a new token; it’s a critical piece of infrastructure that unlocks the next phase of digital finance for thousands of institutions through our partnership.”
According to BitGo, SoFiUSD was also “designed to meet rigorous technical and regulatory standards to facilitate faster settlements, around-the-clock liquidity, and a reliable bridge between traditional banking and digital assets.”
Key features will include “attestations” provided by third-party auditors, ensuring transparency and trustworthy issuance; purpose-built infrastructure, provided by BitGo, to handle “large scale assets”; and “battle-tested smart contracts” and custody, with robust access controls and compliance features that lay the foundation for secure minting, burning, and transactions.
In addition, BitGo reiterated that both itself and SoFi are OCC-regulated institutions, “creating an aligned relationship focused on regulatory compliance within each institution.”
The OCC—which regulates U.S. national banks and federal savings associations to ensure safety, soundness, and fair access—mandates, amongst other things, capital and liquidity standards, risk-management controls, and consumer protections, as well as conducting regular examinations and enforcing Bank Secrecy Act anti-money laundering compliance.
“Together, BitGo and SoFi set a new standard for trust through regulatory alignment,” BitGo said in its press release last week. “The collaboration not only advances technical capabilities, but also offers a level of public transparency and oversight that signals the maturation of stablecoins as part of the global financial system.”
Mastercard also involved
On the same day the BitGo-SoFi stablecoin partnership was announced, SoFi also revealed that it will partner with Mastercard (NASDAQ: MA) to make SoFiUSD available as a settlement option across Mastercard’s global payments network.
Under the partnership, the firms plan to explore how issuers and acquirers could settle card-based transactions with Mastercard using SoFiUSD.
“By working with SoFi to enable SoFiUSD across the Mastercard network, we’re expanding how trusted digital currencies can be used at global scale,” said Sherri Haymond, global head of digital commercialization at Mastercard.
She added that “bringing stablecoin settlement on our network will connect regulated stablecoins with the reliability, security, and reach that consumers, businesses and financial institutions expect.”
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Source: https://coingeek.com/bitgo-selected-to-provide-stablecoin-infrastructure-for-sofiusd/
