Crypto glossary
Embedded wallet
An embedded wallet is created inside an app when a user signs up with email, social login or a passkey, with no separate wallet app or seed phrase needed.
Embedded wallets are built into the application itself by wallet-infrastructure providers. When a user signs up, the app creates a wallet in the background and links it to their login. Keys are typically protected with MPC shares, secure enclaves or passkeys, and many embedded wallets are smart accounts, so the app can sponsor gas fees and bundle actions into a single tap.
They have become the default in consumer crypto apps, games and payment products, because asking newcomers to install an extension and guard twelve words loses most of them. A user can buy an item, receive a reward or hold stablecoins without ever seeing the word wallet. Many providers let users export the key or connect the account to an external wallet later.
The custody question is the one to ask. Some designs are effectively custodial, with the provider or the app able to sign or block access; others keep a share only the user controls. If the provider shuts down or the user loses access to the email account, recovery depends on the export and backup options offered, which vary widely between products.
Example
A mobile game creates a wallet for each player at sign-up with their Google account, so items earned in the game are minted to it without the player ever installing a crypto app.