The 'Final Chapter' of the SoFi USD Shock: The 'Other' Lucrative Revenue Stream Generating Massive Profits
There is a bank called "Silvergate Bank" that once held a unique presence in the cryptocurrency trading market.
By providing accounts to major players in the crypto market, such as exchanges and LPs (liquidity providers), and connecting them directly on a single Silvergate bank ledger, they enabled 24/7 settlement and clearing.
While the cryptocurrency trading market operates 24/7, fiat-based bank settlements are bound by business hours. By bridging this temporal gap, Silvergate became a de facto "settlement hub" that supported the crypto market.
However, Silvergate following the collapse of FTXwas forced to liquidate its business in 2023.
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Up until the previous installment, we looked at an extremely attractive revenue source in the cryptocurrency trading market (B2B) called "reserve management income."
The possibility of reaching an annual profit scale of $3 billion is compelling.
Admittedly, this revenue is influenced by policy interest rates.
It shrinks when rates fall and expands when they rise. It is not something SoFi can control itself. Furthermore, SoFi may also share revenue with distribution partners.
On the other hand, there exists a more stable and
structurally accumulating revenue stream.
<Premise: On-chain transfers are free>
USDT and USDC have built their current status by providing on-chain transfers virtually "for free." Therefore, from the perspective of the battle for the base currency in the cryptocurrency trading market, SoFi also cannot derive revenue from on-chain transfers.
* On-chain transfer: A mechanism that records transactions directly on a blockchain ledger, allowing users to transfer cryptocurrency at high speed and low cost.
However, there are many other attractive revenue opportunities.
<The 'Billing Mechanism' of Clearing Infrastructure>
Silvergate Bank following the FTX collapsechose to voluntarily liquidate as deposit outflows accelerated due to a crisis of confidence caused by market turmoil.However, because the service itself was highly regarded and widely used, its cessation caused significant market disruption.
The cryptocurrency trading market has expanded without having central clearinghouses or unified clearing systems like those in the stock market.As a result, exchanges and LPs have formed a structure that forces them to rely on payment and clearing infrastructure provided by specific private banks.
With Silvergate's exit, the risks inherent in this dependency structure have become a reality. Now that the market has grown and cryptocurrency trading is beginning to be used as 'financial infrastructure,' a more secure and sustainable clearing system is required.
Against this backdrop, SoFi has been joined by the former business head who led this business at Silvergate.
With that expertise, it is not merely a reproduction of the vision Silvergate had of 'banks supporting payment and clearing in the crypto market,' but rather a more sophisticated payment and clearing system of 'highest-quality stablecoin SoFi USD × bank' that will be rebuilt.
If this is realized, it will be possible to aggregate the funds and transaction data of multiple operators onto a single blockchain ledger, enabling instant clearing that includes both stablecoins and fiat currency.
Even in the cryptocurrency trading market, where stablecoins function as the de facto settlement currency, instant clearing services that include connections to fiat currency hold high value. This is because in areas such as accounting, taxation, and regulatory compliance, connections to fiat currency are often inseparable.
As the provider of the clearing infrastructure that serves as that connection point, SoFi can charge a 'clearing infrastructure usage fee' as consideration for its use.
<Revenue Piling Up on Top of Clearing>
It also becomes possible to provide further value-added services on top of the clearing infrastructure.
At the core of this is 'Treasury Function'. This is a service that provides a business foundation to support daily fund management and operations by managing transaction history linked to account balances, centered on balance management that allows for the immediate tracking, clearing, and movement of funds.
Furthermore, on top of this treasury foundation, a 'Reporting Service' for regulatory compliance that organizes and visualizes transaction data, including AML (Anti-Money Laundering) and KYC (Know Your Customer), can also be established.
<Potential to Generate Massive Revenue>
In the cryptocurrency trading market, the same stablecoin is repeatedly used many times in a short period through high-frequency trading, clearing, and so on.Even with a conservative estimate, it is highly likely that the Velocity (the turnover rate indicating how many times the same coin is used for settlement in one year) will exceed 50 times per year.
Even if the outstanding balance of SoFi USD reaches $240 billion and we conservatively estimate Velocity at 50 times, the annual transaction volume would reach approximately $12 trillion.
For this high-speed circulating fund flow, even just charging a fee of about 0.05%—which is effectively 'negligible' as a transaction cost—in the form of clearing infrastructure usage, treasury processing, and regulatory compliance/data provision, would result in $6 billion in annual revenue.
Although it is difficult to expect profit margins as high as those from investment income, if we assume a 50% profit margin and a 25% effective tax rate, there is another timeline that generates massive profits of '$6 billion × 50% × (1 - 25%) = $2.25 billion'.
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'Aiming to be a trillion-dollar company'—.
This series began with these words from SoFi CEO Anthony Noto. In the same presentation, the policy to issue the stablecoin 'SoFi USD' by January 2026 was revealed.
I cannot believe these two statements are merely a coincidence. Were they not made because he senses immense potential in stablecoins?
The stablecoin business will be the core that pushes SoFi to the next stage—.
With that thought, I conclude the 'SoFi USD Shock' series.
*Next time, I will present 'The Basel III 'Time Bomb': The Structural Framework Where SoFi USD Wins'.
[Editor's Note]
It became a long series, but I would be very happy if it has been of any help to you all. As a result of gaining much new knowledge myself, the revenue scenarios I can envision through SoFi USD have reached an even higher level.I will present the expected revenue from sources other than the crypto asset trading market (B2B) in a different format.
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