Unlike deposits in savings and checking accounts at federally insured banks, funds stored in many “peer to peer” apps aren’t automatically protected, putting cash at risk if the app’s parent company stumbles financially, the Consumer Financial Protection Bureau warned this month.
“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.”
https://www.nytimes.com/2023/06/09/your-money/venmo-cash-app-paypal-payment-apps.html