The Consumer Financial Protection Bureau (CFPB), a prominent government agency responsible for safeguarding consumer interests in the financial sector, has issued a warning to American citizens about the potential risks associated with keeping money in payment apps such as PayPal, Venmo, Zelle and Payoneer.
Funds in Payment Apps Prone To Risks
According to a recent consumer advisory published by the federal consumer watchdog, funds held in popular payment apps may not benefit from federal deposit insurance provided by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA).
Read More: XRP Ledger A Game Changer: HSBC On Distributed Ledger Tech
The advisory highlights the vulnerability of funds stored in payment apps, emphasizing the potential financial uncertainty faced by consumers if one of these apps were to fail or go bankrupt. In light of recent bank failures, including Silicon Valley Bank, Signature Bank, and First Republic Bank, the CFPB stresses the importance of understanding deposit insurance coverage when choosing where to store money.
While speaking about the development, CFPB Director Rohit Chopra wrote in a press release:
Popular digital payment apps are increasingly used as substitutes for a traditional bank or credit union account but lack the same protections to ensure that funds are safe.
Bitcoin The Secure Payment Alternative?
This makes the case for Bitcoin (BTC), a true decentralized virtual currency designed to operate independently of any individual, group, or entity. Bitcoin’s core principle of self-sovereignty allows users to have sole ownership and control over their funds and unlike payment apps, Bitcoin does not rely on third-party involvement in financial transactions, thereby eliminating the risk of frozen accounts or bankruptcy.
Bitcoin’s resilience and immunity to central control have made it an appealing option for those seeking financial security. Bitcoin loyalists often highlight it as a hedge against inflation, giving it the status of “digital gold” with enhanced portability, security, divisibility, and other advantageous properties. As a result, Bitcoin has gained widespread adoption, even permeating the US financial markets, with leading banks, financial institutions, and apps such as PayPal offering crypto-related services.
Bitcoin’s Growing Adoption Rate
While Bitcoin is not exempt from price fluctuations, its decentralized nature ensures that funds are not exposed to the same risks associated with payment app accounts. Moreover, according to crypto stalwarts like Elon Musk, Jack Dorsey and Michael Saylor. Bitcoin’s increasing prominence as a secure alternative to traditional systems and its ability to provide users with complete control make it an attractive option for those concerned about the risks associated with third-party control.
As things currently stand, Bitcoin’s price is currently exchanging hands at $27,198 which represents a gain of 0.10% over the past 1 hour compared to an increase of 0.57% over the last 24 hours.
Also Read: Peter Schiff Twitter Account Hacked Days After His Bitcoin NFT Launch
AD
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
