- The digital banking firm follows Gemini in getting a cryptocurrency rewards card to market
- Many in crypto and fintech have said banks with card programs that don’t offer bitcoin rewards could be left behind
SoFi introduced a credit card feature Thursday that allows customers to redeem their rewards points in bitcoin or ether through the digital banking app’s investing platform.
The digital banking firm follows Gemini in getting a cryptocurrency rewards card to market, at a time when adoption of digital assets by institutional investors is gaining steam and helping usher in a new wave of retail interest.
“Cryptocurrency has already established itself as an incredibly valuable asset,” SoFi CEO Anthony Noto told Blockworks by email. “We continue to hear from our members the number one thing they wanted was stocks and fractional shares. The number two thing they wanted was cryptocurrency.”
Many in crypto and fintech have said banks with card programs that don’t offer bitcoin rewards could be left behind and give companies like SoFi and Gemini the gift of growth over the next 10 to 12 years.
The SoFi credit card comes with a 2% unlimited cash-back incentive that customers can now redeem for cryptocurrency credited directly to their SoFi Crypto account.
That’s not too different from using earned money from cash-back credit card purchases and buying cryptocurrency from SoFi Crypto or any other app. But it still adds another touchpoint and lowers the barrier to entry for the many newcomers to cryptocurrency (and investing more broadly), for whom using their own money to buy something carrying a lot of risk can be scary.
“For the many people who have not embraced bitcoin, [crypto rewards] is an option that lets them feel the market,” Brian Riley, director of the credit advisory service at Mercator Advisory Group, told Blockworks earlier this month.
Plus, it’s a good cross-selling opportunity for SoFi.
Riley also said while major institutions like Chase or Citi probably offer bitcoin rewards for a long time, if ever, but others say it’s “inevitable” and “just a matter of time” before banks will dip their toes into crypto rewards.
SoFi has about 1.5 million members today. It said earlier this year it plans to go public by merging with a SPAC, or special purpose acquisition company, backed by billionaire investor Chamath Palihapitiya, who has been invested in bitcoin for about a decade.