SOFI MOVED ITS ENTIRE CARD PROGRAM ONTO A STABLECOIN ITS OWN BANK ISSUES — MORE THAN $25 BILLION A YEAR IN VOLUME — THE SAME RELEASE SAYS THE TOKEN IS “NOT A DEPOSIT” AND “MAY LOSE VALUE”

SoFi announced on September 22 that it is the first nationally chartered bank to go live settling card transactions across Mastercard’s network with a stablecoin. The token is SoFiUSD. The issuer is SoFi Bank, N.A., regulated by the OCC. The scope is not a pilot: “SoFi is migrating its full card program to blockchain-based settlement, with the program expected to process more than $25 billion in annualized volume using SoFiUSD.”

Now read the disclosure at the bottom of the same release. SoFiUSD “is not a deposit, is not insured by the FDIC or SIPC, is not bank guaranteed, is not legal tender and may lose value.” It is redeemable one for one and supported by reserves “consisting primarily of cash.” Primarily is doing work in that sentence, and the release does not say what the rest is.

Settlement is the plumbing between the bank and the network, not the balance in a customer’s account, and nothing here changes what is insured in a checking account. But the plumbing is where a dollar becomes final. A bank has now put the final leg of $25 billion a year of card volume onto a claim it writes itself, redeems itself, and labels as something that may lose value. Anthony Noto, SoFi’s chief executive, said the two companies took stablecoin settlement “from an idea to a live product” in six months.

Six months is quick for a payment rail. It is very quick for a new kind of money. What went live is a dollar that exists because a bank says so, moving over a network that says who may touch it, with a disclaimer attached explaining that it is not the thing it is named after. Bitcoin is not anybody’s liability and carries no disclaimer, which is the entire difference and the reason this is a bitcoin story. At the time of this writing, bitcoin was $86,447.