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Square Cash Eclipses Venmo In Popularity, But Is It Thanks To Bitcoin?

Many have likened the fintech industry to the nascent cryptosphere, as both of these growing spaces are set on overthrowing legacy systems with more efficient, innovative, and unique solutions. While these two industries are far from identical from a top-down perspective, Square, a fintech startup, has recently begun to blur the lines between crypto and fintech.

Image Courtesy of Square

Late in 2017, the fintech firm announced that its so-called “Cash” app would be testing support for the trading of Bitcoin. As the price of the asset reached its peak, Cash launched support for the purchase and sale of Bitcoin.

This move didn’t come as a surprise to many, as Jack Dorsey, the CEO of Twitter and Square alike, has shown fleeting interests and admiration for cryptocurrencies and their underlying technologies. In the announcement regarding the addition of this feature, Dorsey wrote:

We support Bitcoin because we see it as a long-term path towards greater financial access for all. This is a small step.

This move has seemingly helped the app, albeit not single handly, overtake the download figures posted by its primary competitor, Venmo (Paypal), who has tackled mobile payment processing alongside Cash (Square). According to data from Sensor Tower and Nomura Instinet, relayed by CNBC, Cash has been downloaded 33.5 million times, while Venmo has been downloaded 32.9 million times. This move is a result of Square Cash’s staggering growth rate at nearly three times faster than Venmo.

Dan Dolev, a Nomura Instinet analyst, recently expressed his faith in the service in a recent report, noting that the app could garner $100 million in sales by 2020, “even without deeper active user penetration.”

Square Cash And Bitcoin — A Dynamic Duo?

Prior to a recent announcement, Cash’s aforementioned Bitcoin-related feature was only available in a certain set of U.S. states.

But now, individuals all across the US, in all 50 states, can now use the Cash App to buy Bitcoin as they may please.

This feature, along with Cash’s growing dominance in the mobile industry, helped propel the app in popularity, with users stating that they saw the payment solution make an appearance in the top 10 products listed on the Apple App Store. This was backed up by Nomura’s aforementioned report, who noted that Cash was the #1 app in US’ finance category throughout Q2 of 2018.

Although Bitcoin was a welcome addition, it seems that Cash’s rise in popularity cannot be solely attributed to cryptocurrency support, as Dolev alluded to in the following comment:

Interestingly, this relationship (between Cash and Bitcoin’s popularity/price) seems to go both ways. While Bitcoin prices increased in July and Coinbase downloads accelerated 11 percent, Cash App downloads remained stable at 154 percent, showing little variance from prior months’ growth rates.

Nonetheless, Dolev, who is also an executive director at Nomura Instinet, sees the addition of crypto trading as more of a welcome add-on to the service, rather than Cash’s end game.

Photo by Jordan Andrews on Unsplash

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Square Expands Cash App Bitcoin Service to All 50 US States

Mobile payments firm Square now lets customers buy and sell bitcoins via its Cash App in all 50 U.S. states.

The company – which was co-founded by Twitter chief executive Jack Dorsey – announced the service expansion through a Tweet on Monday, months after the firm initially rolled out the bitcoin service to investors in the country.

As reported by CoinDesk, Square officially launched the bitcoin purchasing option on its Cash App in January following a testing phase started last year. However, the service was not offered in the states of New York, Georgia, Hawaii and Wyoming due to their more restrictive regulations regarding bitcoin transactions.

In fact, Coinbase suspended its bitcoin buying service in Hawaii last year after regulators in the state imposed a double reserve requirement on the exchange, meaning it would have been required to maintain cash reserves equal to any cryptocurrency funds held for its customers.

In March, though, Square expanded the option to residents in Wyoming after the Cowboy State passed a bill to remove the double reserve requirement for companies dealing with virtual currencies.

As recently reported, Square has also secured a so-called “BitLicense” in New York, making it one of only a handful of crypto services to be allowed to operate in the state.

CoinDesk reached out to Square to ask about any factors that contributed to its changes of policy in Georgia and Hawaii, but did not receive a reply by press time.

The firm previously revealed in its earning reports that its bitcoin service made a small margin of around $420,000 in the second quarter this year – a number that was still double the figure for the initial three months after the service launched.

U.S. map image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Square Books Small Profit for First Quarter of Bitcoin Sales

Digital payments startup Square made more than $34 million in revenue in the first quarter from cryptocurrency purchases.

In a 10-Q filing submitted to the U.S. Securities and Exchange Commission, Square declared its financial results for Q1 2018, noting that roughly 5 percent of its revenue came from customers purchasing bitcoin through its Cash app. Due to the costs of purchasing the cryptocurrency, the company’s total profit in the time period is about $223,000.

According to the filing:

“For the three months ended March 31, 2018, the revenue recognized from contracts with customers was $648.8 million, including $34.1 million from bitcoin sales. Revenue from other sources was $19.8 million. Impairment losses arising from contracts with customers were not significant in the current reporting period.”

However, the cryptocurrency-based revenue is offset by the $33.9 million it cost to purchase the bitcoin in the first place, according to the filing. Square defines its bitcoin costs as “the amounts we pay to purchase bitcoin in the public cryptocurrency exchanges or from customers. The amount of bitcoin costs will fluctuate in line with the associated revenue.”

Square first enabled bitcoin buying through the Cash app last November as part of a pilot program open to a limited number of users. At the time users were unable to make bitcoin payments using the app.

The company changed this policy in late January, when it gave users the ability to send payments to friends and family members. Bitcoin payments also expanded to almost all U.S. customers, with the exception of those in New York, Georgia, Hawaii and Wyoming – all being states with tougher regulations around cryptocurrencies.

Bitcoins and dollar image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Square Seeks BitLicense to Bring Bitcoin Buying to New York

Digital payments company Square is in the process of applying for a BitLicense in a bid to expand its Cash App’s bitcoin buying option to New York.

A spokesperson for Square confirmed the process following a tweet on Tuesday that suggested the company was “working on” opening up bitcoin buys and sells to users in that area. The company didn’t immediately respond to a follow-up question about whether Square had already submitted an application or if it is preparing to do so.

To date, only a handful of companies have been granted a BitLicense, the regulatory framework first instituted in 2015. The controversial launch ultimately led to a number of companies opting to stop offering services in the state, though recent comments from state lawmakers indicate that the BitLicense may see some revisions in order to alleviate some of those concerns.

Additionally, the Cash App is now available to users in Wyoming, following the passage of legislation in the state that eases the burden on companies that provide cryptocurrency services. Previously, crypto startups had largely stayed away from the state, but this month’s move to exempt those companies from Wyoming’s money transmission statutes effectively cleared the runway for such launches.

The payments app had previously rolled out bitcoin features for most American users in January, excluding customers in four states with stricter regulations, including Wyoming and New York.

Reporting by Michael del Castillo. 

New York City skyline image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Square Adds Bitcoin Buying for More Cash App Users

Digital payments company Square is rolling out the ability to buy and sell bitcoin to more users of its popular Cash App.

The company announced today that, following news last year that it was testing the feature with a limited number of users, the option is being expanded further. That said, users in the U.S. states New York, Georgia, Hawaii and Wyoming – which have more restrictive regulations around the brokering of cryptocurrencies – won’t be able to access the option just yet.

The app allows users to send payments to their friends and family, though notably, they may not be able to share funds to generic contacts on their phones.

The company began trialing the bitcoin buy option last November, letting select users buy or sell bitcoin through their accounts.

In statements on Wednesday, Square chief executive Jack Dorsey (who also leads social media giant Twitter) endorsed the new service, posting that Cash App offers “instant buying (and selling if you don’t want to hodl).”

He continued:

“We support bitcoin because we see it see it as a long-term path towards greater financial access for all. This is a small step.”

In addition to the bitcoin integration, the company also released a dedicated web page explaining bitcoin and how its underlying technology works.

Cash App image by Brady Dale for CoinDesk

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