The PayPal unit has added the ability to buy, hold, and sell cryptocurrencies within its app. Venmo will let users participate if they have a minimum balance of $1 and will offer support for four cryptocurrencies: Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. Venmo is positioning crypto trading to be a social activity—users can share transaction updates with friends via the Venmo feed. They will be able to trade by using funds stored with Venmo or by using their linked bank accounts.
Crypto trading is Venmo’s latest in a slew of new features that move it closer to competing with neobanks like Chime or Varo—even though it eschews the label and prefers to call itself a “digital wallet.”
Venmo’s large user base and brand recognition give it an advantage over other neobanks seeking to become hubs for their clients’ entire financial lives. The company’s user base comes in at a colossal 70 million. Perhaps the most vulnerable of Venmo’s neobank competitors is Revolut, which also offers cryptocurrency trading to its nearly 200,000 US customers and aspires to provide a suite of services beyond basic checking and savings accounts to its clients to make it the center for their financial lives. For example, in the UK, it offers stock trading and insurance options in partnership with Chubb, in addition to crypto trading. However, if Venmo also takes the financial hub approach, then its strong brand recognition and its huge existing user base will give it an enormous edge in customer acquisition over Revolut.