Sending money to family or friends in a different country can be slow and expensive. To solve this, SoFi Technologies is launching a new service that uses Bitcoin’s Lightning Network and a simple addressing system called Universal Money Addresses (UMA). That will help people send money faster. Let’s see what the updates are related to the merger between SoFi and the Lightning Network.
How Does SoFi’s New System Work?
It works through the SoFi App. Once you send money through the app, the money instantly converts into bitcoin, making it simple for money exchange. Following, it travels to the Lightning Network, where it takes some time, then it reaches the other country, and it instantly changes to the country’s local currency and goes directly to the receiver’s bank account.
Instead of complex wallet addresses, SoFi lets you send money using UMA, an address that looks like an email. So it’s easy for anyone to use, even if they don’t know much about Bitcoin.
Launching First in Mexico
The service will first be available for people sending money from the U.S. to Mexico. According to BBVA Research in 2024, the United States sent approximately $62.5 million in remittances to Mexico, which accounts for 96.6% of Mexico’s total remittances for that year. This is one of the biggest money transfer routes in the world. In 2022, around $58 billion was sent from the U.S. to Mexico in remittances. Many families there rely on this money for daily expenses.
After Mexico, SoFi will add the service to more countries. This way, they can make sure everything works well and safely.
SoFi Is Bringing Back Crypto Investing
SoFi, with the cross-border service, is bringing back its cryptocurrency investing. It will offer features like selling, buying, and holding Bitcoin and other popular coins in its app.
This merger of Lightning Networks and SoFi and the restarting of the cryptocurrency investment show that SoFi is thinking big in this area.
Trust and Transparency
SoFi is a licensed national bank, so it follows strict rules to keep your money safe. Before you send money, you’ll see all fees and exchange rates. There won’t be any surprise charges.
The service is available 24/7, which means you can send money any time, even on weekends or holidays. But strict rules and regulations will be needed for smooth transactions.
Advantages of this collaboration:
- This will make the transactions faster
- Using this system will cost less than traditional services
- Sending money cross-country will become simple with just an email-like address.
Expected Challenges
This system looks easy, but it has several challenges. Many people don’t want to merge their bank account with a Bitcoin account.
For this venture to become successful with proper security and protection, SoFi and Lightning Network together need to set some strict rules.
Additional Details
| Detail | Statics |
| U.S. to Mexico remittances (2023) | $63.3 billion |
| Average time for traditional transfers | 2-5 business days |
| Time for SoFi’s Bitcoin transfers | A few seconds |
What’s Next?
SoFi’s new service reflects a bigger change in money transfers worldwide. More banks and fintechs are exploring blockchain to make payments faster and cheaper. If SoFi’s plan works well, it could become the new normal for sending money across borders. That means fewer delays, lower costs, and a simpler experience for everyone.
Related: Bitcoin Drops Below $115K. What’s Dragging Cryptos Down?
Related: How Blockchain Locks Data: A Beginner’s Guide
