Cash App taps Lightning Network for direct dollar-to-BTC payments
Cash App introduces a feature enabling Lightning Network payments directly from cash balances, allowing users to send dollars converted to BTC for the receiver's wallet without pre-owning BTC. This upgrade expands Lightning Network's usage, addressing BTC payments without exchanges. Users can fund BTC payments with their cash or direct balances, while merchants can accept BTC via the Lightning Network. Initially focusing on U.S. users, the feature highlights the integration of proven crypto technologies into fintech apps. Despite BTC's adoption, its high value has limited its use as a payment asset, prompting the exploration of alternative assets like stablecoins.
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Cash App Introduces Lightning Network Payments
Cash App will now provide access to the Lightning Network for payments, enabling transfers from cash balances to BTC wallets without the need to pre-own Bitcoin. This feature allows users to send dollars, which are converted into BTC and transferred to the recipient’s wallet. Users no longer need to hold BTC in advance to make transactions, making it a more accessible option for payments.
New Utility for Lightning Network
This new feature introduces a groundbreaking use case for the Lightning Network. By managing cash payments on BTC rails, Cash App increases its versatility. The app also previewed this feature through its X (formerly Twitter) handle, teasing it before a broader reveal. The payment option was initially soft-launched via social media, where users discovered they could send funds directly without owning BTC upfront. This innovative payment flexibility is driving engagement.
Functional Enhancements in BTC Transfers
Cash App had previously integrated Lightning addresses for BTC payments in 2022. However, this newer payment infrastructure goes a step further by preserving BTC holdings while still using Lightning Network to facilitate value transfers. Users can fund BTC payments using either their Cash App balance or their direct cash balance, offering flexibility. This update eliminates the need to route payments through exchanges by allowing direct transfers to BTC wallets.
Merchant and Customer Benefits
The app also caters to merchants, enabling them to receive BTC payments directly from user balances via the Lightning Network. Customers, meanwhile, can utilize their regular Cash App balance for these transactions. This functionality will primarily target users in the USA, though the app is also approved for use in the UK. This advancement arrived just weeks after Square (Cash App’s parent company) expanded BTC payment options.
The Growth of the Lightning Network
The Lightning Network, initially launched in 2018, has experienced substantial growth in usage and payment channels. It remains supported by prominent figures like Jack Dorsey and other crypto influencers. As of November 2025, the network holds over $500M in value, though its centralization remains its primary weakness. The network depends heavily on liquidity from major node operators to secure reliable payment routes. In theory, the network could expand to support other forms of payment and balance mechanisms.
BTC as a Payment Asset
BTC adoption as a payment tool has lagged despite its widespread availability. Its high value often deters holders from spending, steering them toward alternative assets like stablecoins. Even so, Cash App continues to lead in simplifying crypto buying and transfers to self-custody wallets. While BTC remains popular for peer-to-peer transfers, its transactions lack confidentiality, and the coin is primarily viewed as a store of value rather than a regular payment tool.