SoFi Puts Idle Crypto Cash Into an Interest-Bearing Deposit

SoFi Technologies has launched a tokenized deposit product for customers who want cash set aside for cryptocurrency purchases to continue earning interest. The company said cash held in a SoFi Earn account will generate 4.4% annual interest and receive eligible Federal Deposit Insurance Corp. protection of up to $250,000 per depositor if a bank fails.

How the product works

Customers can use the account to buy crypto directly or transfer funds to another platform. SoFi chief executive Anthony Noto said the product is aimed at people already participating in crypto who want their money to remain productive while ready to move. The arrangement gives customers a bank-based alternative to leaving trading funds idle.

A bank alternative to stablecoin yield

Crypto users have often kept funds in interest-bearing stablecoins while waiting to trade. That approach faces a new constraint after the GENIUS Act barred stablecoin issuers from paying interest. The change creates an opening for regulated financial institutions to offer products that combine on-chain functionality with conventional deposit protections.

Traditional banks are increasingly exploring digital-asset products. Reuters reported that 21 financial institutions, including Goldman Sachs, Bank of America, Citi and Deutsche Bank, plan to form a company to issue a dollar-pegged cryptocurrency in the first half of 2027. Spark chief executive Sam MacPherson said the broader effort to move traditional finance on-chain is likely to accelerate.

What customers should note

The FDIC protection described by SoFi applies to eligible deposits and the stated insurance limit. Customers should distinguish that bank-deposit framework from the protections and risks associated with non-bank stablecoins. The launch also puts SoFi into a market where regulated institutions are competing for crypto-linked cash.

Illustrative file photo of cryptocurrency coins on a keyboard; not a SoFi product or a depiction of the deposit account. Photo: Jakub Żerdzicki / Unsplash. Unsplash License; cropped to 16:9. Image source; license.

Sources

• Reuters