Social Finance Inc. is edging deeper into cryptocurrencies, allowing its customers to redeem rewards earned through the company’s app for Bitcoin or Ethereum.
Starting Thursday, SoFi clients can apply their 2% cash-back rewards toward the two cryptocurrencies, Chief Executive Officer Anthony Noto said in a phone interview. The crypto program is among the first to be made available in the industry.
“There’s a thirst for more and more innovation that we continue to hear from our members,” Noto said. “The No. 1 thing they wanted was stocks and fractional shares. The No. 2 thing they wanted was cryptocurrency.”
SoFi’s clients are typically able to use rewards for offerings that improve their financial health or introduce them to new features on the site, such as signing up for credit-score monitoring or sending money to friends through the app. Clients can also continue to redeem rewards in cash or put them toward SoFi Invest products.
SoFi plans to extend its investing operation to include 15 more cryptos in the following week.
Noto was a former technology dealmaker at Goldman Sachs Group Inc. and an executive at Twitter Inc. before joining SoFi. He likens the rise of Bitcoin to Amazon Inc. and EBay in the late 1990s, when those companies were still highly volatile investments.
Bitcoin “has already established itself as an incredibly valuable asset,” Noto said. “It should be a small percentage of assets because it is very volatile. We put a warning label that says it’s an unproven asset.”
SoFi is joining a wave of credit-card companies enticing a new generation with crypto rewards. Mastercard Inc. said this week it was pairing with Gemini, the digital-asset exchange run by Cameron and Tyler Winklevoss, while Visa Inc. said in December it’s partnering with startup BlockFi for a specific card that offers Bitcoin rewards of 1.5% of purchases.
Mastercard is allowing cardholders to earn as much as 3% back toward Bitcoin or more than 30 cryptocurrencies on Gemini’s platform.
— With assistance by Jennifer Surane, and Matthew Leising