Nasdaq-Listed SoFi Taps Bitcoin Lightning for Remittances

Welcome to The Protocol, CoinDesk's weekly wrap-up of the most important stories in cryptocurrency tech development. We’re Margaux Nijkerk & Jamie Crawley, reporters at CoinDesk.

In this issue:

Nasdaq-Listed SoFi Taps Bitcoin Lightning for RemittancesBitcoin DeFi Project Enters Solana with BTC-Backed Token YBTCValantis Acquires stHYPE, Expanding Liquid Staking Reach on HyperliquidHyperbeat Secures $5.2M Backing From ether.Fi, Electric CapitalUnknown block type "divider", specify a component for it in the `components.types` option

Network News

SOFI TAPS BITCOIN LIGHTNING FOR REMITTANCES: SoFi Technologies will soon allow remittance payments on top of the Bitcoin layer-2 Lightning Network through a partnership with Lightspark, aiming to bring real-time international money transfers to its members. SoFi's remittance product, which is expected to roll out later this year, will allow users to send U.S. dollars through the SoFi app, with recipients receiving local currency deposits abroad, using Lightspark's Universal Money Address (UMA). Lightspark’s UMA provides access to a global payment rail designed for speed and scale. Transfers will display upfront exchange rates and fees, addressing longstanding pain points in traditional remittance services. The launch follows SoFi’s reentry into crypto, after halting services in 2023 during its transition to a national bank. Earlier this year, it revealed plans to offer international remittances through blockchain and stablecoins and allow users to invest in crypto. — Jamie Crawley Read more.

BITLAYER ENTERS SOLANA WITH YBTC: Bitcoin DeFi project Bitlayer has partnered with Kamino Finance and Orca to bring its bitcoin-backed token, YBTC, to the Solana ecosystem. This integration is intended to combine Bitlayer's security with Solana's speed and scalability, aligning with Bitlayer's goal of expanding the Bitcoin DeFi sector. It will provide bitcoin holders with native BTC exposure and yield opportunities, said Charlie Hu, co-founder of Bitlayer. YBTC, pegged 1:1 with BTC, is central to Bitlayer's BitVM bridge, which is designed for trust-minimized bitcoin transfers by eliminating centralized intermediaries. The token serves as a direct representation of users' locked BTC within the Bitlayer ecosystem, enabling seamless interoperability between Bitcoin and decentralized finance applications. By holding YBTC, Solana users can maximize yields through Kamino’s institutional-grade earn vaults, which provide auto-compounding and optimized BTC-denominated returns, helping assets grow effortlessly. — Omkar Godbole Read more.

VALANTIS ACQUIRES stHYPE: Valantis, a decentralized exchange (DEX) protocol, has acquired Staked Hype (stHYPE), the second-largest liquid staking token (LST) on Hyperliquid. Financial terms of the deal were not disclosed. stHYPE, which launched as the first LST on HyperEVM, currently holds about $180 million in total value locked (TVL), according to the stHYPE website. Following the deal, stHYPE’s operations, development, and scaling will be managed by Valantis Labs. Addison Spiegel, founder of Thunderhead, the team behind stHYPE, will serve as an advisor to Valantis. Liquid staking has become a central pillar within Hyperliquid’s ecosystem. According to DeFiLlama, liquid staking accounts for more than half of Hyperliquid L1’s $2.26 billion in DeFi TVL. The acquisition builds on Valantis’ earlier launch of LST-specific DEX pools for both stHYPE and hHYPE, which together have attracted nearly $70 million in TVL and processed more than $500 million in trading volume. — Oliver Knight Read more.

HYPERBEAT GETS $5.2M IN SEED: Hyperbeat, a protocol powering yield infrastructure on the Hyperliquid decentralized exchange, has closed a $5.2 million oversubscribed seed round co-led by ether.fi Ventures and Electric Capital. The raise will be used to build out their yield infrastructure for traders, protocols, and institutions that are tapped into the Hyperliquid ecosystem. The round also drew investments from Coinbase Ventures, Chapter One, Selini, Maelstrom, Anchorage Digital, and community backers via the HyperCollective. Hyperbeat serves as the native yield layer for Hyperliquid, building permissionless financial infrastructure that allows anyone to earn, stake, and spend directly from their on-chain portfolio. It unlocks yield generated by Hyperliquid’s funding rates—previously accessible only to sophisticated market participants—and packages it into simple, tokenized vaults. The news of the seed raise comes as Hyperliquid’s total value locked surpasses $2.1 billion, and as institutions are starting to develop greater interest in its ecosystem. — Margaux Nijkerk Read more.

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In Other News

SkyBridge Capital, Anthony Scaramucci's investment management firm, plans to tokenize $300 million worth of its hedge funds on the Avalanche network. The firm is bringing its Digital Macro Master Fund and Legion Strategies on-chain in partnership with tokenization provider Tokeny and its parent, Apex Group, which manages more than $3.5 trillion in assets, according to the press release shared with CoinDesk. Apex acquired Tokeny earlier this year. The initiative uses the ERC-3643 token standard with operational support from Apex’s Digital 3.0 platform, which handles issuance, administration, and distribution. — Kristzian Sandor Read more.Thumzup Media, which counts Donald Trump Jr. as a large shareholder, said it will acquire Dogehash Technologies, Inc. in an all-stock deal, pivoting from digital marketing into industrial-scale crypto mining. Under the agreement, Dogehash shareholders will receive 30.7 million Thumzup shares, according to a Tuesday release, valuing the transaction at $153.8 million, based on the shares' closing price. The combined company will rebrand as Dogehash Technologies Holdings, Inc. and list on Nasdaq under the ticker XDOG, pending shareholder approval later this year. The company says it will also use Dogecoin’s DogeOS layer 2 to stake in DeFi products, aiming to boost miner returns beyond standard rewards. — Sam Reynolds Read more.Unknown block type "divider", specify a component for it in the `components.types` option

Regulatory and Policy

The crypto industry is mounting a counteroffensive against Wall Street bankers’ bid to rewrite the U.S.’ new stablecoin law, arguing that attempts to roll back core provisions of the GENIUS Act would tilt the field toward traditional banks. In a letter to Senate Banking Committee leaders dated Aug. 19, the Crypto Council for Innovation and the Blockchain Association urged lawmakers to reject proposals from the American Bankers Association, Bank Policy Institute and state banking groups that called for stripping out Section 16(d) of the law and banning yield programs offered by affiliates of stablecoin issuers. Section 16(d) allows subsidiaries of state-chartered institutions to conduct money transmission across state lines in support of stablecoin issuer activities, ensuring holders can redeem their tokens nationwide without needing separate state licenses. Banking groups warned earlier this month that allowing state-chartered, uninsured institutions to issue stablecoins and operate nationwide would amount to regulatory arbitrage, bypassing state licensing regimes. — Sam Reynolds Read MoreThe U.S. Federal Reserve's newest vice chair who supervises Wall Street banking, Michelle Bowman, made a crypto speech on Tuesday that could have been uttered by one of the industry's own policy wonks, advocating that banks get behind the digital assets surge and that the Fed give the sector rules that won't get in crypto's way. At the Wyoming Blockchain Symposium, Bowman warned banks that don't embrace the shift toward crypto "will play a diminished role in the financial system more broadly," and she further underlined what's already been an obvious change in crypto sentiment from U.S. banking regulators. "Your industry has already experienced significant frictions with bank regulators applying unclear standards, conflicting guidance, and inconsistent regulatory interpretations," she said. "We need a clear, strategic regulatory framework that will facilitate the adoption of new technology, recognizing that in some cases, it may be inadequate and inappropriate to apply existing regulatory guidance to address emerging tech." — Jesse Hamilton Read more.Unknown block type "divider", specify a component for it in the `components.types` option

Calendar

Sept. 22-28: Korea Blockchain Week, SeoulOct. 1-2: Token2049, SingaporeOct. 13-15: Digital Asset Summit, LondonOct. 16-17: European Blockchain Convention, BarcelonaNov. 17-22: Devconnect, Buenos AiresDec. 11-13: Solana Breakpoint, Abu DhabiFeb. 10-12, 2026: Consensus, Hong KongMay 5-7, 2026: Consensus, Miami