Venmo, the peer-to-peer payment service owned by PayPal Holdings Inc., said Tuesday that it has begun allowing users to buy, hold and sell cryptocurrencies on its app, a move that could inspire more widespread adoption of the asset class.
The company said that Venmo users will be able to buy Bitcoin, Ethereum, Litecoin, and Bitcoin Cash for just $ 1 and post the transactions to the app's feed.
With more than 70 million customers, Venmo is one of the most popular payment applications in the United States, especially among young consumers who use it to pay friends and family. It processed about $ 159 billion in payments last year.
California-based PayPal has become one of the most active major financial companies in the cryptocurrency space.
In October, it began allowing users to buy, sell, and hold cryptocurrencies in their digital wallets, and last month it began allowing customers to spend their virtual currencies at millions of merchants around the world.
These launches helped drive a surge in virtual currencies. Bitcoin is up nearly 90% since the beginning of this year, fueled by interest from major financial firms who are betting on adopting it more and using it as a hedge against inflation.
Venmo's cryptocurrency launch also coincides with increased competition in the peer-to-peer payments sector in the US.
Square Inc's rival Cash app, which has allowed cryptocurrency purchases since 2018, has seen a boom in user growth over the past year. Other financial startups popular with young consumers, like broker Robinhood, also allow buying and selling cryptocurrencies.
The Venmo 2020 Customer Behavior Study found that more than 30% of Venmo customers have bought cryptocurrencies or stocks, and 20% of them have started buying during the pandemic.
"Our goal is to provide our customers with an easy-to-use platform that simplifies the buying and selling of cryptocurrencies and demystifies some of the common questions and misconceptions consumers may have," Darrell Esch, Venmo Senior Vice President, and General Manager, said.
Crypto on Venmo is enabled through PayPal's partnership with Paxos Trust, a regulated provider of cryptocurrency products and services.
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