Why Mastercard Adopted SoFiUSD: The Battle for Financial Infrastructure Has Begun
The recently announced partnership between SoFi and Mastercard is not simply about
・Mastercard card payments, and
・"SoFiUSD becoming usable" on the MTN (Multi-Token Network) that Mastercard is promoting.
It is not that simple.
What is important is that
・rapid settlement alone is insufficient, and
・Mastercard has adopted a stablecoin that can be used for circulation and settlement in a responsible manner.
In other words,
・the responsibility structure is clear, and
・it can circulate on a public network not closed to a specific organization
—this indicates that "SoFiUSD" meets these conditions.
In this article, we will organize why SoFiUSD was adopted in this partnership instead of USDT (Tether)/USDC (Circle).
◆What is MTN (Multi-Token Network)?
MTN is a network for
・safely moving bank deposits, stablecoins, tokenized assets, etc.,
・between companies and banks (B2B), and is an initiative to make settlement mechanisms more efficient.
This is because in current B2B payments,
・multiple financial institutions and correspondent banks intervene in transactions, and
・due to factors such as reconciliation work, business days, time differences, and regulatory compliance,
the structure has become slow, opaque, and high-cost.
However, what companies and banks are looking for is not just "money that moves fast."
It is the point of whether it can be "handled responsibly."
From this perspective, the true conditions required for "settlement" are summarized in the following three points:
・At what point is the settlement legally finalized?
・Who ultimately guarantees the value? (Bankruptcy risk)
・Who bears the responsibility when fraud or sanctions violations occur? (AML/KYC)
※Naturally, these same conditions are also important in card payment settlement.
This is where the strengths of SoFiUSD suddenly come to the fore.
◆ Settlement Completion
In the context of blockchain,
a transaction is often said to be finalized
in the sense that a block has been approved and recorded on the ledger.
However, what is truly important is not technical finality, but rather
at what point it can be said to be 'legally' irrevocable—that is the question.
In B2B transactions, it is not uncommon for a single transfer to reach tens or hundreds of millions of dollars.
If that capital
could potentially be disputed later
or could be subject to different interpretations under the contract,
it becomes unusable in practice.
USDT and USDC certainly enable rapid settlement.
However, they rely heavily on the issuer's terms of service, redemption conditions, and freezing authority, and settlement is not automatically resolved within the existing legal system.
On the other hand, SoFiUSD has the advantage that 'settlement is easier to organize in line with the existing financial legal framework.'
◆ Bankruptcy Risk
Stablecoins are said to be '1 coin = 1 dollar.'
However, who can guarantee that one dollar?
Also, if the issuer goes bankrupt, there is no public insurance system.
• The reserves held are seized as 'assets of the bankrupt company,'
• funds are frozen until the court finishes the liquidation,
• and in the worst case, there is no full repayment, and refunds take years.
On the other hand, bank-type stablecoins can hold backing assets directly in an FRB account, so there is no rational reason for them to deviate from 1 coin = 1 dollar.
Also, the fact that a bank is the issuer means that 'the handling in the event of bankruptcy falls within the existing framework of bank regulation and supervision.'
In the United States, if a bank fails, the FDIC (Federal Deposit Insurance Corporation) intervenes immediately and, under legal responsibility, protects and refunds up to $250,000 per depositor in principle within a few days.
Furthermore, bank bankruptcy proceedings are carried out on a high-speed route separate from general corporate bankruptcy procedures.It is not uncommon for business transfers to other banks to take place over the weekend, allowing money to be withdrawn as usual on Monday.
In other words, because a bank is the issuer, it is at least easier to resolve within the existing framework of bank regulation and bankruptcy processing.
For Mastercard, this leads to peace of mind that even in the worst-case scenario, it will be handled within the framework of 'law and authorities.'
Conversely, USDT/USDC lack this.
◆AML (Anti-Money Laundering) / KYC (Know Your Customer)
In the world of crypto assets, 'whether or not a transfer can be made' is often discussed technically.
However, what is important for banks and companies is whether they can explain in advance that:
・This counterparty is identity-verified and not subject to sanctions,
・The transaction is appropriate for the purpose of the contract and the remittance is permissible.
While stablecoins like USDT/USDC have certain blacklist management and freezing functions, they often involve "post-incident response after a problem is discovered" and are difficult to use for "pre-control."
In contrast, the bank-based approach is the opposite.
For a bank-based stablecoin, the bank bears the responsibility of confirming the following before a remittance, based on bank-level AML/KYC obligations:
・Who are the sender and receiver?
・Is the region permissible?
・Is the purpose appropriate, and are there any signs of sanctions or suspicious transactions?
before the transfer.
This difference is overwhelmingly effective in B2B and financial institution settlements.
◆ Summary
What is truly needed is a "currency that can be circulated with responsibility."
In this instance, SoFiUSD, issued by SoFi, has been adopted within the Mastercard framework as a currency that meets those conditions.
Admittedly, this partnership will not manifest as short-term revenue at this moment.
Mastercard card payments using SoFiUSD and MTN are still in the early stages, and full-scale expansion is yet to come.
However,it is significant that SoFiUSD has secured a position in an area that could become the core of future fund transfer infrastructure.
Therefore,the evaluation criteria may change in the medium to long term.
Through the partnership with Mastercard, its aspect as a "financial infrastructure company" will strengthen.
If SoFiUSD comes to be used as a foundation for payments and remittances, the revenue structure will shift from individual services to one that is "continuously" generated from the network itself.
This means it has extremely high scalability and will follow a growth trajectory different from traditional banking models.
In thearticles about stablecoinsI have written repeatedly about the strengths of SoFiUSD. I have also consistently pointed out that the stricter the requirements become, the more likely SoFiUSD is to be chosen.
I am not saying that competitors will not emerge in the future.
However, at this moment, I cannot identify any stablecoin other than SoFiUSD that simultaneously meets the conditions of being "under bank supervision" and "public-type."
As long as this situation continues, more companies will continue toadopt SoFiUSD, just like Mastercard.That is an inevitability that occurs precisely because SoFiUSD has high competitiveness.
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