Jack Dorsey's Cash App enables Bitcoin Lightning and stablecoin payments

Popular payments platform Cash App has rolled out a host of product updates on Thursday, including a feature for bitcoin and stablecoin payments.

"Cash App has rolled out 11 product updates and made more than 150 improvements to meet the way that millions of people earn, manage, and share money today," the company said in a statement. "The brand’s first-ever bundled release includes more flexible banking benefits, AI-powered navigation, the ability to send and receive stablecoins, and more - all underpinned by robust safety features."

Cash App was created by Block Inc. (ticker XYZ), a company co-founded by Jack Dorsey. The payments app was developed under Dorsey's leadership. Dorsey is the long-time bitcoin proponent who famously co-founded Twitter, the social media platform later sold to Elon Musk, who rebranded it as X.

The payment platform adding stablecoin support comes at a time when adoption of USD-pegged tokens is at an all-time high. Besides major U.S. financial institutions taking an interest or launching initiatives of their own, Cash App's competitor Zelle might also begin using stablecoins. Early Warning Services, which operates Zelle, recently began exploring allowing for international transfers using stablecoin technology.

"The way people earn and manage money has fundamentally shifted, and traditional financial institutions haven't kept up to meet their needs," said Owen Jennings, who serves as an executive officer and business lead at Block. "At Cash App, we're hyper-focused on building a platform that reflects how customers are actually participating in the economy today."

Cash App's new update will also make it possible for users to pay in bitcoin, using the Lightning Network, even if they don't hold the cryptocurrency, by automatically converting their USD balances. "Eligible customers will be able to select U.S. dollars as a currency option after scanning a Lightning QR Code, allowing them to make fast, low-cost payments using their Cash USD balance - without having to spend or hold actual bitcoin," Block said.

Customers will also be allowed to pay with bitcoin at merchants that accept BTC. Square merchants will be able to opt into receiving USD to USD, BTC to BTC, BTC to USD, or USD to BTC payments.

Last month, Square Bitcoin rolled out a feature enabling merchants to accept bitcoin with no fees until 2027, a move Mizuho analysts said was a “big test” of whether the cryptocurrency can evolve from a store of value into an everyday payment method. Block holds 8,692 BTC, worth about $858 million, according to The Block's data. 

Block's XYZ stock is down over 5% to $62.30 amid a wider market pullback.