The digital payments company Square has announced its plans to create a business with a focus on Bitcoin cryptocurrency to design decentralized financial services.
Square CEO Jack Dorsey posts about these new plans on Twitter saying that the company is “focused on building an open developer platform with the sole goal of making it easy to create non-custodial, permissionless, and decentralized financial services.” This unit is set to include Seller, Cash App, and Tidal.
As Dorsey has always been a Bitcoin fanatic, his desire to push Square into the cryptocurrency business is no surprise. Earlier in the year, he even commented that he believed Square would create its Bitcoin hardware wallet to store the cryptocurrency.
Square Inc. is an American-based payments company that is most commonly known for its mobile payment platform CashApp. The platform allows users to link their bank account to it, making it easier for them to complete transactions. CashApp had been the leading platform until Venmo gained popularity. The company recently expanded by creating a banking platform, the reason most likely being to keep up with the competition. They filed for a bank charter so that the company could “operate more nimbly, which will serve Square and our customers as we continue the work to create financial tools that serve the underserved,” said Square Inc. Chief Financial Officer Amrita Ahuja. The idea of creating a business focused on crypto shows they continue to prove their desire to expand in fintech to help customers.
DeFi is the most common term for decentralized finance and is what the new business will use. This form of finance is used by many applications because it is not controlled by a central bank or government. Instead, decentralized finance uses blockchain to complete transactions. DeFi is typically preferred because of its relatively low cost and completes transactions more efficiently. While this is true, many issues go along with its use such as the increased risk of fraud and money laundering, as well as a high level of volatility.
Heading the new business will be Mike Brock, leader of strategic initiatives at CashApp. He is a great believer that expanding in fintech is just what the company needs to be the best. In a tweet, he says: “From the printing press to the internet to bitcoin – technology has the power to distribute power to the masses and unleash human potential for good, and I’m convinced this is the next step.” In just a matter of time, we will see if he is right.
Morse, Andrew. “Square to Build New Bitcoin Business for Developers of Financial Services.” CNET, CNET, 15 July 2021, www.cnet.com/tech/mobile/square-to-build-new-bitcoin-business-for-developers-of-financial-services/.
Tanayamac. “Square Is Building a Decentralized Finance Business Using Bitcoin.” CNBC, CNBC, 16 July 2021, www.cnbc.com/2021/07/16/square-is-building-a-decentralized-finance-business-for-bitcoin.html.