Telegram Wallet, a popular Telegram bot for buying and selling cryptocurrencies like Bitcoin (BTC), has decided to prioritize ease of onboarding by choosing custody over self-custody, according to a senior executive. In July 2023, Telegram integrated its custodial crypto wallet into the messenger, allowing users to access it directly from their settings. However, not all users are currently able to see the wallet bot in their settings, as this feature is still being rolled out.
The full rollout of the Telegram Wallet is expected to begin in November, starting with several African and Latin American countries. This will allow users in these regions to access the Wallet and engage in cryptocurrency transactions. The rollout will then continue to other regions such as the Middle East, Southeast Asia, Central Asia, and Eastern Europe. Once the global rollout is complete, the Wallet will be available in the Telegram settings menu worldwide, except in jurisdictions where it does not operate.
Unlike major self-custodial wallets like MetaMask, the Telegram Wallet bot operates as a custodial wallet. This means that users entrust their coins to a third party and do not have direct ownership of their assets. For example, to withdraw Bitcoin from the Telegram Wallet, users must have enough BTC to cover the Wallet’s fees, which may sometimes be higher than the native fees on the Bitcoin network.
According to Halil Mirakhmed, the Chief Operating Officer of Telegram Wallet, the decision to choose a custodial solution over a self-custodial one was primarily driven by the goal of easy onboarding for new users. He highlighted the challenges faced by users who are new to crypto and emphasized the simplicity and convenience of the Telegram Wallet’s onboarding process. By clicking on the Wallet in their Telegram settings, users can immediately start using crypto without needing to navigate the complexities of self-custodial wallets.
Mirakhmed explained that self-custodial wallets require users to deal with tasks such as storing the seed phrase and paying gas fees for transactions, which can be overwhelming for non-crypto native users. In contrast, Telegram Wallet aims to facilitate the use of crypto by simplifying the onboarding process. Users can send assets to their contacts directly from their Telegram app, eliminating the need to know the recipient’s wallet address.
However, it is essential to note that custodial wallets offer convenience at the expense of security. Self-custodial wallets are generally considered to be more secure but less convenient. The main responsibility of keeping the private key or seed phrase safe lies with the user when using a self-custodial solution.
The decision to prioritize easy onboarding through a custodial wallet reflects Telegram’s commitment to expanding the adoption of cryptocurrencies. By simplifying the user experience and reducing barriers to entry, Telegram Wallet aims to bring crypto to a broader audience. As the global rollout progresses, more users will have access to the Wallet, further fueling the growth of the crypto market.