The Square Cash App is now cryptocurrency-enabled in all 50 states. This is a huge step in the direction of driving Bitcoin trading into the mainstream, and with the low transaction fees since Lightning Network has been implemented, it potentially becomes viable as a means of exchange, using this and similar mobile apps.
Square announced the application upgrade via a tweet from its Cash App profile with the message, “Red, white, and bitcoin. Now you can use Cash App to buy bitcoin in all 50 states.”
Red, white, and bitcoin. Now you can use Cash App to buy bitcoin in all 50 states. pic.twitter.com/D4fhVRz7WL
— Cash App (@CashApp) August 13, 2018
Legal Bitcoin trading in several states requires approval and expensive licensing. Square obtained a New York BitLicense in mid-June. At that time, itBit also received a BitLicense, to add Stellar Lumens to their trading platform for New Yorkers, driving the company’s stock price up 88% for a 52-week high.
Though we are not financial advisors, and you should consult with a professional before making any major investment, it’s possible that the move by Square may help to drive the price of Bitcoin back up towards $8,000 as it recovers from its recent drop to the $6,000 support level. In addition, this move makes Square a more formidable alternative to PayPal, which currently does not offer the ability to buy or sell cryptocurrencies.
Square has been licensed as a money-transmitter in New York since 2015. This no doubt provided a level of experience for the company to jump through the regulatory hurdles imposed by the Cuomo administration to obtain the coveted BitLicense.
Average downloads of the Square Cash App have continued to increase since 2016, outpacing other alternatives like Venmo, and this move may help to keep that trend going.
Square did a soft launch of Bitcoin purchasing through its app in January 2018. At that time, Bitcoin trades were not available in New York, Georgia, Hawaii and Wyoming. The addition of all of these states to the fold suggests two things. First, it means that the test launch likely showed promising results, with enough potential for revenue growth to warrant the additional resources required to obtain licensure in all 50 states. Second, it means that Square has indeed been aggressive about its integration of Bitcoin trading into the application. As many stores are already equipped with a Square Point-of-Sale, it would be a small step to expand the app’s capabilities to provide liquidity for customers’ digital assets, making them usable for purchases at all of the stores in their network.
While Square is expanding its crypto offerings to include states like Hawaii, a top digital exchange, Coinbase, has suspended operations in Hawaii due to unreasonable regulatory requirements that included a double reserve. This would have meant that the company would have had to maintain matching cash reserves for coins traded. By contrast, Wyoming eliminated its double reserve requirement, making it attractive for Square to pursue that market.
Bitcoin trading volume on Square is still tiny by comparison to its total volume, with a margin of just $420,000 in Q2. However this figure represents double growth since the service launched, and with the addition of large markets like New York, there’s no reason why it couldn’t continue to grow.
Daniel is an experienced and dynamic entrepreneur with a demonstrated history of launching and operating successful businesses. Skilled in Business Strategy, Technical Consulting, Coaching, Sales, Entrepreneurship, Team Building, and Public Speaking.
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