Venmo
The Venmo service, owned by PayPal, lets users buy, sell and hold bitcoin and other cryptocurrencies within the Venmo app, the company announced today. “Customers will have the ability to buy and sell cryptocurrencies using funds from their balance at Venmo, or a linked bank account or debit card,” the announcement reads.
Users can buy or sell bitcoin, ether, litecoin and bitcoin cash. The feature is being introduced to some users today and “will be available directly to all customers in the Venmo app within the next few weeks.”
When available, users can get started “by clicking on ‘Crypto’ in the Venmo menu at the top right of the app,” reads the announcement. Crypto purchases can be made for only $ 1, but each purchase has a minimum fee of 50 ¢. Each user is limited to $ 20,000 in cryptocurrencies purchases each week and $ 50,000 during each 12-month period.
Venmo’s announcement said nothing about paying for goods or services with a cryptocurrency, but the capability could come to Venmo later. As CoinDesk wrote today, “PayPal started trading in certain cryptocurrencies for US customers last November and began paying users in crypto in March.” PayPal says that when the user pays with a cryptocurrency on PayPal, the service ‘automatically switches[s] it in USD or another currency, at no extra charge. “
No peer-to-peer crypto transactions
At least Venmo at least does not support peer-to-peer crypto transactions or the ability to transfer cryptocurrency from one account to another. “Venmo only supports the purchase and sale of cryptocurrencies with your Venmo account”, reads a common question about Venmo. “To complete P2P transactions with Venmo, all crypto assets held by Venmo must be sold and converted into USD.”
The ability to hold cryptocurrency in your Venmo account only applies to cryptocurrencies that you have purchased on Venmo, which means that you will not be able to transfer bitcoins or other cryptocurrency from other sources to Venmo.
The PayPal and Venmo crypto systems use the Paxos crypto brokerage service. “PayPal also granted a first conditional BitLicense through the New York State Department of Financial Services (NYDFS), which enabled PayPal and Venmo to offer their customers the ability to buy, sell and hold cryptocurrency,” said PayPal. .
Like PayPal, Venmo is making purchases and sales of cryptocurrencies possible in most of the US, but not in Hawaii, where the market has restrictive regulations. Venmo notes that “buying, selling and holding cryptocurrencies is not regulated in many states, including the state of California.”
Crypto-traders need to verify their identity
Venmo does not support cryptocurrency transactions for business profiles, which limits the ability to individual users. Although anonymity is often seen as a major benefit of using cryptocurrency, Venmo notes that the crypto service is only available to U.S. customers “who have verified their identity with Venmo.”
Venmo also pointed out that cryptocurrency trading “could lead to significant losses.”
“Venmo does not cover losses due to price fluctuations in the cryptocurrency, and we recommend that customers make sure that the purchase of crypto is right for their individual financial situations,” the Venmo questions said. “As crypto purchases and sales are not reversible, Venmo urges customers to do their research and make decisions carefully.” Venmo does promise that “purchases of cryptocurrency will be protected if unauthorized activities take place.”
Venmo says its fees for crypto transactions usually range from 1.5 percent to 2.3 percent; fees are 1.5 percent on purchases or sales above $ 1,000; 1.8 percent on transactions between $ 200.01 and $ 1,000; 2.0 percent on transactions between $ 100.01 and $ 200; and 2.3 percent on transactions between $ 25 and $ 100. A minimum fee of 50 ¢ is applied to transactions between $ 1 and $ 24.99.