SoFi becomes first US bank to offer Lightning Network transfers

SoFi Technologies has announced a major step forward in digital banking. The company will now allow users to send money internationally using Bitcoin’s Lightning Network.

This makes SoFi the first bank in the United States to use this technology for real-world payments.

The move was made possible through a new partnership with Lightspark, a company building Bitcoin infrastructure. Lightspark was founded by David Marcus, who was previously president of PayPal. 

Together, SoFi and Lightspark will bring fast, low-cost international money transfers to SoFi’s app, starting with Mexico.

This system lets users send US dollars, which are instantly turned into Bitcoin ($BTC). The Bitcoin is sent across the Lightning Network, a faster and cheaper way to move Bitcoin. 

When it reaches its destination, the Bitcoin is converted into the local currency and deposited straight into the recipient’s bank account.

SoFi is also using Lightspark’s Universal Money Address (UMA) system. This replaces long account numbers and routing codes with simple email-like addresses. 

Users can now send money by typing something that looks like an email instead of complex banking details.

According to SoFi, this will make sending money abroad much simpler. The process is automatic, and the recipient doesn’t need to know anything about cryptocurrency. Everything happens behind the scenes. They simply receive their funds in their local currency.

SoFi says the service will start in Mexico and then expand to other countries. These regions are home to millions of people who rely on money sent from family members working in the US.

SoFi CEO, Anthony Noto, said the new feature will make a big difference for customers, emphasising that for many SoFi members, sending money to family abroad isn’t optional – it’s essential.

The company has also opened an early access waitlist. Full access to the service will be available later in 2025 for users with SoFi Checking & Savings accounts.

Faster, cheaper, more transparent

The goal of the new service is to improve how money moves across borders. Many current remittance services are slow, costly, and unclear about their fees. 

In some cases, fees are hidden in bad exchange rates. Transfers can also take several days to complete.

SoFi’s new system promises to be faster, cheaper, and more transparent. Transfers will work 24 hours a day, 7 days a week, even on holidays and weekends. 

Transactions will settle in seconds, reducing the risks of price changes while the money is moving.

SoFi said its fees will be lower than the US national average for remittance costs, which often range above 6%. The company also promised clear pricing, with no hidden markups on exchange rates.

Instead of using slow, traditional systems like SWIFT, SoFi is using the Lightning Network. This is a layer-2 solution built on top of Bitcoin that allows near-instant and low-cost payments.

The Lightning Network has been gaining popularity for this reason. It offers a faster and cheaper way to move Bitcoin than the main blockchain, which can be slow and expensive during high usage.

With this setup, SoFi customers will be able to send dollars, have them converted to Bitcoin instantly, and sent through Lightning. 

Once the funds arrive, they will be converted again into local money – like Mexican pesos – and deposited into the recipient’s account. The recipient does not need to use or understand Bitcoin.

The UMA system also plays a big role. It removes the need to copy long strings of bank numbers. Users just type in a simple address, like an email, and the money gets sent. This makes the process much easier, especially for people who are not tech-savvy.

According to SoFi, this helps avoid small mistakes that can delay transfers. It also makes the system feel familiar to users who are used to sending emails or messages.

Crypto returns to SoFi as market watches Bitcoin

This move comes after SoFi temporarily stopped offering crypto trading in 2023. The company made that decision while working to get a national banking licence. 

Now, with its licence secured and regulations clearer, SoFi is returning to the crypto space.

SoFi resumed spot trading for Bitcoin and Ethereum in June 2025. It also plans to add new features like stablecoin support, crypto staking, and loans backed by digital assets.

In April 2025, CEO Anthony Noto said the company wants to expand its use of blockchain in areas like lending, investing, payments, and insurance. The new partnership with Lightspark is a major step in that direction.

Lightspark was launched in 2022 and has helped other companies adopt the Lightning Network. In April 2024, Coinbase integrated Lightning for faster Bitcoin payments. Within a year, 15% of all Bitcoin transactions on Coinbase were processed this way.

Nubank, a popular digital bank in Brazil with over 100 million customers, also announced a partnership with Lightspark in 2024. However, Nubank has not yet launched its own service.

Analysts say SoFi’s decision could put pressure on other US banks to follow. Many have stayed away from Bitcoin and other crypto tools, sticking only to trading services. 

But SoFi’s move shows that Bitcoin and blockchain can be used to improve banking services, not just disrupt them.

SoFi’s launch may also challenge old names in the remittance space, such as Western Union and MoneyGram. 

These companies rely on older systems that can be slow and costly. With faster and cheaper crypto options becoming available, customers may begin to shift away.

Online, the news has been well received. Some users on X called the move a “bullish signal” for Bitcoin and praised SoFi for bridging the gap between crypto and banking.

Still, not everything is smooth. SoFi’s stock price dropped 6.11% on August 19, 2025, the day of the announcement. 

It hit a 52-week low of $22.75. But the fall was linked to wider market issues, not the news itself.

Bitcoin holds ground at $114,000

As SoFi launched its new service, Bitcoin’s price stayed steady. On 20 August 2025, Bitcoin traded at $114,000. The Crypto Fear & Greed Index stood at 56, placing the market in the “Greed” category. 

This suggests that investors are still feeling confident, though the reading is slightly lower than past weeks.

Last month, the index hit 72. A week ago, it was 68. A day earlier, it was 60. While sentiment has cooled slightly, the market still leans towards optimism.

Data from blockchain analytics firm, Glassnode, showed that new and existing buyers are still active. In the past five days, first-time buyers increased their holdings from 4.88 million BTC to 4.93 million BTC. That’s a 1% rise.

More committed investors, often called “conviction buyers”, added even more. Their holdings went up by 10.1%, from 933,000 BTC to 1.03 million BTC.

At the same time, some sellers stepped in. Loss Sellers, those selling at a lower price than they bought, rose by 37.8%, from 63,000 BTC to 87,000 BTC. Profit Takers also increased, up 5.4% to 1.83 million BTC. This was the biggest weekly increase in profit-taking so far this year.

Still, analysts say this is not unusual. Market commentator, Quinten Francois, noted that Bitcoin has dropped and bounced back over 1,000 times in past cycles. “These kinds of dips are part of normal price movements”, he said.

Glassnode also noted that as Bitcoin’s price dipped recently, new demand entered the market. Some investors waited for a better entry point and bought in as prices tested lower ranges.

Institutions also made moves. BlackRock sold 490 BTC worth $68.7 million and Ethereum worth $87.2 million. Even after the sale, it still held 749,500 BTC. 

Meanwhile, its spot Bitcoin ETF, IBIT, reached a new record of over $91 billion in assets under management.

Ark Invest, led by Cathie Wood, sold 559 BTC worth $64.4 million through its Bitcoin ETF. The sale came during a period of red ETF flows in August. 

Earlier in the year, Wood said she believes Bitcoin could hit $1.5 million in the future, pointing to wider adoption by firms and institutions.

As SoFi takes its bold step into Bitcoin-powered banking, all eyes will be on how well the service performs and whether other banks follow. 

The combination of blockchain and traditional finance may still face challenges, but SoFi’s move suggests that change is already underway.