SoFi Launches First Bank-Issued Tokenized Deposits Paying 4.4%

SoFi is paying 4.4% interest on the first tokenized deposit product ever issued by a national bank for consumers. The company announced SoFi Earn, or SOFIE, on Thursday, according to its investor release. The tokens are functionally equivalent to cash, sit on a blockchain, and carry FDIC protection.

The launch lands in the middle of a heated, often confusing debate over tokenized deposits versus stablecoins—two forms of digital dollars that hold the same value but answer to very different regulators and serve different use cases.

What's the difference between SOFIE and a stablecoin?

Stablecoins like USDC, owned by Circle and Coinbase, are backed 1-to-1 by dollars or U.S. Treasuries and can be transferred to anyone in the world with a crypto wallet. But they currently live outside the U.S. banking system. They can't earn interest, and they get no FDIC backing.

Tokenized deposits do both. That's why banks like Citi have already built them for institutional customers—capturing blockchain benefits such as instant settlement and 24/7 money movement while staying inside the existing banking regime. SoFi, which holds a federal banking charter, is the first to bring the structure to consumers.

There's a catch, and stablecoin advocates point to it as a big one: tokenized deposits only move money between parties that both hold accounts with the issuing bank.

Why is SoFi doing this?

The move isn't obvious at first glance. SoFi customers can already earn a competitive rate on the company's savings account, and they can already buy SoFi's own stablecoin, SoFiUSD. CEO Anthony Noto told Fortune the target user is a crypto native—someone who parks money in stablecoins while riding out market swings and wants that cash to earn yield.

"I say to my team 'money doesn't sleep' doesn't mean it just moves 24/7, but it also needs to be making money 24/7," Noto said.

Customers will be able to buy Bitcoin and other cryptocurrencies directly with their tokenized deposits. Noto called crypto companies "low hanging fruit" for adoption, noting they'll be able to pay Mastercard and other service providers that also bank with SoFi.

The bigger play, according to Noto, is stacking another product onto SoFi's growing financial services suite. In practice, he said, individuals and companies will be able to toggle between legacy rails like ACH and wire transfers and blockchain-based options—all within a single interface.

What does this mean after the Clarity Act's collapse?

SoFi Earn arrives just after Congress let a major crypto bill, the Clarity Act, fall apart. The legislation foundered largely over a provision that would have let companies pay interest on stablecoins.

The fault lines are familiar. The banking industry argued that interest-bearing stablecoins could pose an existential threat to financial stability. The crypto industry and its allies countered that banks simply want to protect a business model that often pays consumers virtually nothing on their deposits.

SoFi's answer threads that needle: yield, FDIC insurance, and blockchain settlement—inside a chartered bank. If consumers bite, SOFIE becomes the first real test of whether tokenized deposits can compete with stablecoins on the retail side of the market.