Since starting in 2019, the Bitcoin-powered payments app Strike has aimed to become a global crypto-powered equivalent to Venmo or Cash App. On Friday, the companyled by 29-year-old entrepreneur Jack Mallersannounced that it was expanding to a total of 65 global markets, in addition to the U.S., El Salvador, and Argentina, where it already operates.
In an interview with Fortune in Miami, Mallers touted Strikes consumer-facing app, which offers Bitcoin and Tether transfers, through what he described as a frictionless onboarding.
We think there are billions of people that want a money app with those characteristics and capabilities contrasted to a clouded world of crypto exchanges and hidden, unregistered licensing regimes and 1,000 different coins, he said.
At a time when the U.S. crypto industry is confronting regulatory uncertainty, and as the Securities and Exchange Commission is suing firms for offering unregistered securities, Mallers said this is a validation of Strikes Bitcoin-first approach.
I think Bitcoin stands alone, and just how obvious it is that it is owned by nobody, Mallers told Fortune. Every other instrument in this industry has a founding team, a foundation, and they issued some [tokens] privately and handed them out in auctions before they went liveand that sounds a lot more like a security.
SEC Chair Gary Gensler has publicly stated that he views Bitcoin as a commodity not a security.
Mallers notes Strike has taken a regulation-first approach in the U.S., including in New York, where Strike is currently not available but in the process of applying for a so-called BitLicense.
Mallers added that Strikes expansion into other global markets came about partly as result of moving its global headquarters to El Salvador, which passed a digital assets law earlier this year establishing a regulatory framework for crypto. According to Mallers, Strike received one of the first licenses under the new regime, along with Bitfinex.
Mallers has ties to El Salvador and its president, Nayib Bukele, who established Bitcoin as legal tender in 2021. Mallers introduced Bukele at the Bitcoin Miami conference in 2021, where the president made the announcement by video.
Although Strike was initially tapped to help develop El Salvadors Bitcoin experiment, it later retreated from the project, which suffered from early bugs and slow adoption.
Despite reports that businesses and residents of El Salvador are not using Bitcoin, Mallers cited other metrics, like increased tourism. I do think that El Salvador found hope in Bitcoin, he said, arguing that merchant adoption wasnt what was defining success.
The next challenge for Strike will be to expand its ties to banking services that let customers exchange Bitcoin for fiat currency. Currently, customers in Strikes new markets will only be able to receive Bitcoin from other users, although Mallers said that he aims to launch new features, including a debit card, later this year. Another challenge comes in the form of network congestion and higher fees on Bitcoin transactions due to recent demand for new products like ordinals and BRC-20 tokens. Mallers argued that Bitcoin is working as intended.
The claims that [congestion] is hurting the third world, and it invalidates how emerging markets are using this technology is ridiculous, he said.
Mallers also pointed to another Strike featureSend Globallywhich allows users to transfer between USD and other currencies over Strike using Bitcoin as an intermediary, although it is limited to twelve countries in Africa, Central America, and Southeast Asia.
Currently, dollar balances in Strike are held in Tether, a dollar-pegged stablecoin that has drawn criticism for its shadowy accounting. Mallers said that the company decided to go with Tether, as opposed to other options like Circle and Coinbases USD Coin, because of demand from users in the Global South.
They dont trust Circle, he said. If Im being totally honest, Circle is built for American institutions.
As advocates make the case that the Lightning network can actually transform Bitcoin into a payments service, Strikes expansion represents the first attempt to build an app that allows people across the world to transact with each other.
Mike Brock is the CEO of TBD, a Bitcoin-focused division of Jack Dorseys financial technology company Block. Even as Block plots a global expansion for its payment platform Cash App, Brock was supportive of Strikes effort.
If your mission is to advance any decentralized ecosystem, then you better hope that theres actually a pretty competitive marketplace of different companies vying for solutions within that system, he told Fortune.
Two years after Mallers introduced Bukele at Bitcoin Miami, he reflected on the changing circumstances, wearing a hat emblazoned with the El Salvador flag.
Two years ago, people would have made fun of me [for our] headquarters in El Salvador to launch product for three billion people, but now Coinbase is fighting with Gary Gensler, he said. Whos laughing now?
