While cryptocurrencies are seeing volatile sessions with wide swings in valuations, their usage continues to increase, attracting attention from a wider audience. The Square Cash App—a popular mobile payment service developed by Square Inc. (SQ) that allows users to conveniently buy bitcoins and transfer money using a mobile phone app—has announced expanding its bitcoin support to all the 50 U.S. states. (See also: What Is Square Inc?)
Referring to the red and white strips in the American flag, the company announced the progress by tweeting: “Red, white, and bitcoin. Now you can use Cash App to buy bitcoin in all 50 states.”
Earlier this year, the Cash App launched a service that allows users to conveniently purchase bitcoins. However, Square’s services were not available in the states of Georgia, Hawaii, New York, and Wyoming owing to their strict restrictions imposed on crypto transactions. During March, Wyoming removed its requirement for the crypto operators to hold equivalent reserves in cash which paved the way for Square to offer service in that state. The San Francisco-based company acquired the necessary license from the New York State Department of Financial Services (DFS) in June to start operations in New York.
Now Offering Nationwide Coverage
Square has now succeeded in expanding to the remaining two states of Hawaii and Georgia, as evident from the company’s recent announcement. However, it is not clear how the company managed to secure the necessary permissions in these two states—whether the states relaxed a few norms or the company secured the necessary. Similar to Wyoming’s earlier requirement, Hawaiian regulators mandated a requirement for reserve maintenance for cryptocurrency service providers operating in the state. Last year, leading cryptocurrency exchange Coinbase was forced to withdraw its services from the state owing to the reserve requirements, according to CoinDesk.
Square’s Cash App continues to rise in popularity and has recently surged past its nearest rival, PayPal Inc.’s (PYPL) Venmo. According to recent data from Nomura and Sensor Tower, the cumulative downloads of Square’s Cash app grew three times faster than Venmo’s and have surpassed those of Venmo for the first time. The Cash App now has 33.5 million downloads compared to Venmo's 32.9 million. The app is expected to top $100 million in sales by 2020 as it builds dominance over rivals. (See also: Square Is Winning With Its Cash App: Nomura.)
In recently reported second-quarter results, Square generated around $37 million in revenues and spent $36.6 million to offer bitcoin on its app, resulting in tiny profit of around $420,000. While the profit figure is nearly double the previous quarter's, the company's focus remains on the “goal to continue to drive utility in the Cash App," and not “try to push on the monetization of bitcoin today,” according to Square Chief Financial Officer Sarah Friar. (See also: How Square Cash Works and Makes Money.)