BitLicense has been a huge pain to many bitcoin and digital currency based startups operating in the State of New York. Once BitLicense was made mandatory and the deadline to apply for BitLicense surpassed, few of the companies decided to withdraw their services from New York while other companies who considered New York to be an important market decided to stick on and apply for it.
Circle, a bitcoin based money transfer application was one among the many bitcoin companies that applied for BitLicense and recently it went on to become the first company to receive BitLicense from New York State authorities as well. Soon after receiving BitLicense, the company has introduced a lot of changes to the existing Circle platform. The company published the changes in a blogpost available here.
Circle has now included US Dollar in addition to bitcoin for in-app transactions. This means Circle users can not only send and receive bitcoins, they can use regular fiat currency – the US Dollar to do the same. Users can also deposit US Dollar directly into their Circle accounts and use it later for executing transactions within the application. This way, one doesn’t have to buy bitcoin from a bitcoin exchange before they can transfer funds to their circle account.
With the addition of US Dollar, Circle offers cross-compatibility between bitcoin and US Dollar. Users can now use either use bitcoin, US Dollar or both interchangeably for transactions. Also, this new feature helps protect users from bitcoin price volatility. The feature made popular by Bitreserve, a bitcoin service platform founded by Halsey Minor. Halsey Minor is a well-known entrepreneur who founded CNET (later got acquired by CBS Corporation) and Salesforce.
Circle doesn’t charge any conversion fee for converting bitcoin to US Dollar or vice versa on the platform. Users can now fund their Circle account instantly through debit cards and credit cards. The platform offers zero transaction charges for debit card payments, while credit card payments will incur a small network fee.
While all these improvements look great on paper, in reality users are left fuming due to technical issues. There are speculations that Circle has put bitcoin in the backseat and adopting US dollar as a mainstream currency of operation on the platform. Converting and withdrawing bitcoin don’t seem to be as simple as the company makes it appear. Some users have reported that when they attempt to pull bitcoin out of their Circle account, the platform is withholding it for about 30 days before executing the transaction. Even credit card and debit card payments announced in the blog doesn’t seem to work for few people and the mention of bitcoin seems to have conveniently disappeared from Circle’s promotional videos.
At this point, many Circle users are expecting bitcoin to experience a slow death on Circle and it may turn out to be just another wallet application that deals with fiat currency.