Digital bank SoFi (SOFI) and cryptocurrency exchange Kraken are connecting their financial systems through a new partnership agreement. Under the agreement, Kraken will be able to use SoFi’s banking services and U.S. dollar settlement channels, while SoFi will introduce Kraken’s trading infrastructure into its own customer system, further expanding its digital asset service capabilities.
Payward, the parent company of Kraken, will join SoFi Exchange Network (SEN). According to a press release obtained by CoinDesk on Thursday, after joining SEN, Kraken’s institutional customers will be able to conduct U.S. dollar fund transfers and liquidity management around the clock, without being subject to traditional banking business hours.
At the same time, Kraken will also list SoFiUSD, a stablecoin issued by SoFi Bank. As another part of the partnership, SoFi plans to use Kraken Prime to provide an additional source of liquidity for cryptocurrency trading for its own customers.
SoFi CEO Anthony Noto said: “The financial system should not shut down when the markets are open.” He pointed out that SoFi hopes to enable businesses to transfer funds between different networks without having to bear the time delays brought by traditional banking infrastructure.
The partnership also reflects the financial industry’s competition around “one-stop” service platforms. Cryptocurrency exchanges are gradually moving beyond simple token trading businesses and expanding into areas such as stocks, derivatives and payments; at the same time, fintech companies and traditional financial institutions are entering the crypto field from the other side, incorporating cryptocurrencies, stablecoins and blockchain settlement into their own financial service systems.
Payward Co-CEO David Ripley said that in the future, millions of users may directly purchase their first crypto asset through the application they use to receive their salaries, while the infrastructure supporting this user experience will need to establish connections with deep liquidity markets capable of meeting large-scale trading demand.
SoFi Continues to Advance Its Cryptocurrency Strategy
The partnership is part of SoFi’s efforts to expand its digital asset business again. The fintech company has already added cryptocurrency trading functionality to its application and launched the U.S. dollar-backed stablecoin SoFiUSD. This means that SoFi currently has both a consumer-facing crypto business and blockchain-based payment infrastructure.
Around this strategy, SoFi is also continuing to improve its banking business system. In April this year, the company launched large enterprise banking services, integrating corporate banking services with digital asset services on the same platform. At the same time, SEN provides enterprise customers with around-the-clock fund transfer channels.
With Payward joining this system, the banking and fund transfer infrastructure previously built by SoFi is further connected with large trading platforms in the cryptocurrency sector.
For Kraken, the partnership also fills another part of its business system. Kraken Prime will become an additional channel for SoFi to obtain cryptocurrency liquidity and may help SoFi further complete the pricing of in-app crypto trading.
On the other hand, after SoFiUSD enters the Kraken platform, it will also be made available to Kraken’s retail, professional and institutional customers, thereby expanding the stablecoin’s coverage.
The company said that the current partnership between the two sides may further extend into payments, treasury management, lending and other digital asset services in the future.