American banks are expanding tokenized deposits to compete with stablecoins, notably Circle’s USDC. SoFi launched SoFi Earn, which pays a variable annual yield of 4.40% and is covered by federal deposit insurance up to $250,000, subject to applicable limits. Each SOFIE token represents a dollar deposited with SoFi Bank and can be converted at par into SoFiUSD for blockchain transfers, although doing so forfeits the yield and federal insurance protection. The strategy benefits from the GENIUS Act’s ban on interest payments by stablecoin issuers, while JPMorgan, Citi, and Wells Fargo are also launching their own deposit-tokenization solutions.
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