(Bloomberg) — Jack Dorsey is capitulating to the rise of regulated digital dollars. The Bitcoin maximalist who long argued the cryptocurrency could anchor everyday payments is now steering Block Inc.’s Cash App to support stablecoins, marking a sharp break for a company that built its crypto identity around Bitcoin purity.
The Block co-founder and chairman, who has insisted Bitcoin alone could anchor everyday payments, is moving the financial technology firm toward supporting dollar-backed tokens angling to integrate into the traditional financial infrastructure instead of upend it. Cathie Wood, whose towering Bitcoin forecasts defined the last cycle’s exuberance, is scaling them back as institutional flows consolidate around assets engineered for price stability and regulatory acceptance.
Their shifts underscore a broader recalibration inside crypto’s old guard, as its staunchest champions acknowledge that the industry’s momentum is around stable tokens whose issuers are quickly moving to come under the regulatory umbrella and even, in some cases, applying for narrow banking charters. That contrasts starkly to Bitcoin’s founding ethos of anti-establishment and decentralization.
The peer-to-peer and banking platform Cash App was among the first to widely offer Bitcoin balances and Dorsey has long argued that if the original cryptocurrency doesn’t become a tool for everyday payments that it risks irrelevance. Until now, Block has mirrored its founder’s creed by exclusively supporting Bitcoin and to-date accumulated 24 million customers using the platform to buy, store and spend Bitcoin. Now, the company is expanding into stablecoins by making the digital assets interoperable with users’ cash balances. Users will soon be able to deposit stablecoins as US dollars in their cash balances and send stablecoins to another person’s wallet. The company plans to launch with multiple stablecoins, including Circle Internet Group Inc.’s USDC token.
The added stablecoin support comes as momentum around the digital assets typically designed to track the value of a dollar one-for-one has continued to build following the passage of the first US regulatory framework for stablecoins in July. Since then, traditional financial institutions, retailers and startups have all become increasingly public about potential plans to support the tokens which promise faster, cheaper and more efficient payments, especially for cross-border transactions.
While Block is adding stablecoin support, it’s still investing in popularizing Bitcoin for everyday payments. The company announced a feature making it possible for Cash App customers to pay sellers over the Lightning Network, a blockchain designed to make Bitcoin transactions fast and cheap. At checkout, customers will need to scan a Lightning QR code and pay directly from their cash balances while sellers would receive Bitcoin. Block is also launching a map to help consumers find merchants that accept Bitcoin payments. “Cash App is – and always will be – Bitcoin-first by design,” Miles Suter, Bitcoin product lead at Block said in an announcement.
There have been several attempts to popularize paying directly from stored balances or bank accounts via QR codes at checkouts to steer consumers away from card payments that can be costly for merchants, but the clunkiness of the experience compared to the ease of card payments has been a significant adoption hurdle. Despite the likely uphill battle ahead, Dorsey has expressed a commitment to trying to popularize alternative payment methods.
“Bitcoin, everyone in the company hated it,” Dorsey said at a recent Block event in New York. “But we want to make a bet on something that is an alternative to Visa and Mastercard. We want to make a bet on an open network. We want to make a bet on an open protocol for the internet that allows us to move money and be on a level playing field that we can bring all our customers onto as well.”
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