$SOFI × $MA: Stablecoin Deal Could Unlock $1B+ Profit Potential

$SoFi Technologies Inc.(SOFI)$ $MasterCard(MA)$ Stablecoin partnership is a game-changing development for Sofi's new crypto business.

The market completely shrugged it off because of the Fintech sell-off, and the Iran War is sucking all the attention.

SOFI US dollar stablecoin, SoFiUSD, will support settlement across the Mastercard network.

Historically, card transactions are settled by banks in fiat currency through central banks, taking a long time, sometimes days.

This partnership allows SOFI to move money instantly at any time, instead of waiting days for traditional banks to process transactions. Issuers and acquirers can choose to settle transactions in SoFiUSD, allowing for 24/7/365 instant settlement.

Simply put, by using their own digital currency, they can avoid paying expensive fees to middleman banks and keep more of that profit for themselves.

Sofi will begin by settling all its Mastercard transactions using SofiUSD, demonstrating the usefulness of this technology.

Then, through its Tech Platform business, other companies will use this faster technology.

There are huge applications for this technology in:

- Remittances

- B2B Payments

- Bank-to-Bank Settlements

SOFI has the potential to make billions in fees from its stablecoin.

The way it works is that each $1 of SoFiUSD is backed by $1 of actual fiat money.

For instance, Tether, the issuer of USDT stablecoin, has $184B in circulation, backed by $184B in fiat, which is invested in stable assets, generating billions in interest income.

If the SoFiUSD stablecoin gains traction with banks to settle Mastercard transactions, remittances, and other payments, it could reach volumes in the tens of billions.

Let's say SoFiUSD gets to $40B in circulation.

At 3.5% interest rate, that would generate over $1.4B in revenues.

Operating costs for such a business would be minimal, as everything is automated. Also, unlike for bank deposits, SoFi wouldn't incur any interest costs.

They could realistically have an 80-90% pre-tax margin.

That's $1.1-1.3B in pre-tax earnings.

For context, in 2025, $SOFI earnings before taxes were $526M.

So this one product alone could double Sofi's pre-tax 2025 earnings.

And this doesn't even include any additional transaction, maintenance, or SaaS fees that it could generate.

BULLISH SOFI

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$SOFI × $MA: Stablecoin Deal Could Unlock $1B+ Profit Potential

For SG users only, Welcome to open a CBA today and enjoy access to a trading limit of up to SGD 20,000 with unlimited trading on SG, HK, and US stocks, as well as ETFs.

Find out more here.

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