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In summary
- Cash App removed support for peer-to-peer Bitcoin payments as of December 20.
- Despite the removal, Lightning Network functionality for Bitcoin remained available outside of New York.
- Cash App maintained “Bitcoin Gifts” and continued to generate significant Bitcoin profits in 2023.
Cash App — the payments app started by Twitter founder Jack Dorsey — has ended its support for free peer-to-peer (P2P) Bitcoin payments.
“Cash App will no longer support sending and receiving Bitcoin between $cashtags,” starting December 20, according to a recent announcement. However, customers outside of New York can still use the Lightning Network to receive or send Bitcoin.
Additionally, “Bitcoin Gifts will continue to be available,” the company stated. The changes only affect Bitcoin support, without affecting transfers made in fiat currency.
A Cash App spokesperson told Decrypt that the decision was made “to focus our internal resources on the products and services that Bitcoin holders on the app use and value most.” The company representative also stated that the firm maintains its “commitment to developing innovative and accessible products for customers who use Bitcoin.”
Cash App launched in 2013 under its original name Square. It started as a P2P payment system similar to PayPal’s Venmo. It has since expanded to support Bitcoin transfers and purchases, stock investments, savings, loans, and prepaid Visa cards.
While the company does not share Bitcoin usage statistics on the platform, its regulatory filings show that Bitcoin support is generating money for Cash App. The documents show that in the fourth quarter of 2023 the firm generated more than $65 million in Bitcoin gross profits, up about 90% compared to Q4 2022.
Reports from late February showed that app Block Inc. saw “the total sales amount of Bitcoin sold to customers — which we recognize as Bitcoin revenue — was $2.523 million, an increase of 37% year over year.” Data from BusinessDasher shows that the payments super app currently has more than 57.3 million active users on its platform.
The internal changes follow reports in May that Cash App’s features led US federal prosecutors to investigate its compliance practices. Internal documents allegedly admitted that “due to the nature of the product,” their customers “do not appear to leave stored balances in Cash App for very long,” leading to limited “ability to lock a stored balance or decline funds.”
“In virtually all situations, balances have been depleted at the time of review,” the company noted.
The report also noted that Cash App was involved in small transactions with sanctioned countries, including Russia, Iran, Cuba and Venezuela. The report follows the US Department of Justice’s investigation into major Cryptocurrency exchange Binance for possible violations of Russian sanctions in May.
Edited by Stacy Elliott.
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