The Boston-based Bitcoin startup has become the first company to get a BitLicense, a licence from the New York Department of Financial Services (NYDFS) that allows companies to offer their services in New York State.
Controversial or necessary?
The BitLicenses are the department’s attempt to regulate the cryptocurrency industry and the challenges posed by its pseudonymous nature. The framework is supposed to allow digital currency companies to expand their businesses, whilst at the same time giving consumers the protection offered by mainstream institutions such as anti-money laundering compliance and cyber security protocols.
However, many companies do not see the regulatory requirements in that way. Companies such as GoCoin have dropped New York State from its areas of operation.
Acting Superintendent Albanese said: “Issuing the first BitLicense is an important milestone in the long-term development of the virtual currency industry. Putting in place rules of the road that help protect consumers from loss or theft and root out illicit activity is vital to building trust in this new financial technology.”
The licence, for which Circle paid a one-time fee of $5000 means the two-year company that counts Goldman Sachs as one of its backers can operate in the New York State area. And wasted no time in making the most of it.
The company now allows its users to store and send dollars as well as bitcoin. They can switch back and forth between the currencies at any time with zero fees.
The upgraded service also allows users to send and receive money over text message. Its iOS, Android, and Web apps are now called Circle Pay and they’re available now in the iOS and Android app stores. New features include higher limits for cashing in, spending, and cashing out, meaning most customers will start with a $300 weekly limit and have the opportunity to graduate to $3,000. Circle also said it won’t charge any fees on fund top-ups that are made with debit cards.
BitLicense ‘still not perfect’
The company did however have reservations about the licence saying, “We’ve been fairly vocal about our concerns with the BitLicense, especially in its initial incarnation.”
The company’s founder, Jeremy Allaire, went on to describe it as “still not perfect” but “the BitLicense and its requirements became clear and irrefutable prerequisites for serving and supporting everyone in New York.”
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