The news: PayPal-owned Venmo now lets users transfer crypto assets to Venmo and PayPal accounts and to external wallets and exchanges, per a press release. Users can transfer Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.

In Venmo’s Crypto tab, users can send their crypto by selecting another Venmo account or entering a recipient's external wallet address. To receive transfers, the solution will display a unique crypto address QR code that Venmo users can share.

Why this matters: PayPal launched the same feature last June. Bringing this feature to Venmo increases the app’s utility and can help boost user engagement among the 62.8 million US consumers we expect will use Venmo in 2023—more than one-fifth of the US population.

It also helps solidify Venmo as a mainstay crypto player as prominent crypto wallets and exchanges enable similar third-party transfers.

Why now? Given the turmoil of the crypto industry, it may seem like a bad time for this rollout. But Venmo and PayPal are placing their bets on the long term.

• A string of crypto failures has hurt crypto’s reputation and compounded uncertainty in the space.
• And recent bank failures have made it harder for crypto firms to access funding and banking services due to lenders’ increased caution and regulators’ warnings.
• This is all on top of a poorly defined regulatory environment with no clear rules, which has led other crypto exchanges, like Coinbase, to move some operations offshore.

The bigger picture: Despite all this, PayPal is betting that crypto will come out on the other side.

• The company seems to believe that blockchain technology can benefit payments and broader financial services.
• PayPal hopes to gain early adopter advantages and win over the niche crypto crowd before it goes mainstream. We expect 23.9 million US consumers will own crypto in 2023, composing 9.0% of the country’s population.

This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a daily recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.

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