Venmo might not be so venerable after all.

According to CNBC reports, the Consumer Financial Protection Bureau (CFPB) issued a warning to users of popular money apps like PayPal, Venmo, CashApp that they could lose all their money if their cash holder goes belly up.

Do you think that’s impossible? First Republic Bank, one of the key leaders in regional banks, collapsed early last month, triggering a mini-banking crisis, with two more regional banks following, shortly after.

The CFBP director told CNBC, “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.”

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This puts millennials further into an already precarious economic situation since 94% of cash app users are millennials. It seems like they don’t have the same financial protection their parents and grandparents once had.

Many millennials don’t go through a traditional banking route or have a traditional checking account. 85% have used a financial app at least once in the last year.

However, the newer generations is generating some serious cash for the companies, with PayPal reporting $27.5 billion dollars in revenue last year, alone and CashApp reporting $17.5 billion.

At first glance, no longer being tethered to a bank seems like an opportunity for financial freedom. Your cash will not be subjected to interest rates nor will you be charged overdraft fees.

Thinking long term, however, your money will not need backing from big banks.

What’s a potential solution? Use the apps but store your money in a bank for now. 

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