The financial services company and creator of USDC Circle has terminated Bitcoin SV wallet HandCash’s agreements immediately. This move suspends the top-up functionality with a debit or credit card as well as delays HandCash’s much-anticipated 5.0 update, which includes a full USDC integration. I had the opportunity to ask HandCash CEO Alex Agut some questions regarding this unfortunate decision.
Dear friends,
We have received a few minutes ago some unexpected news: Circle has decided to drastically terminate all our agreements, effectively immediately.
This means our top-up systems with debit card have stopped working. Our team is working on a replacement.
Stay tuned
— HandCash (@handcashapp) January 31, 2023
Why do you think Circle terminated your agreements?
Look, we were very pissed off about the situation when it happened, but the reality is that we do not know the exact reasons. Right now, we can only be thankful to Circle for this over a year of working together, and I wish them the best. USDC is still a great asset, regardless of this situation. We have to give them that. The way this happened, though, it’s really hard for us to believe there were no political reasons behind it. But that’s fine—it may have happened for the best. This will only make us way more cautious about our resiliency moving forward.
Do you think issues related to users’ debit or credit cards in terms of purchasing a digital currency (BSV) or bypassing issuance of USDC on BSV were factors in the agreement termination?
Again, we do not know, but if that were ever an issue, it could have been addressed or discussed over the past year without making a fuss about it. In all our exploratory calls with their team, and we even sent diagrams on how this would work, they seemed to be ok with it. We demoed the integration to their marketing team not long ago, and they seemed to be open to having a long-term relationship, knowing each other.
How does this affect the 5.0 update in terms of a stablecoin integration?
We decided to launch 5.0 as soon as possible, even with just one currency support. The app is just better in many aspects. In terms of having that U.S. stablecoin inside the app, we are looking at four very compelling solutions, and we are in the phases of negotiating terms and figuring out time-to-market. Right now, time-to-market is a big factor. The solutions are a couple of native BSV stablecoins that are in the works, wrap USDC but outside of Circle’s infra or do something more creative, given we learned something pretty interesting about the legal status of tokens, we could issue ourselves. No decision has been made as of today, but we would like to make this decision this week.
How much work percentage-wise will have to be redone because of reliance on Circle APIs, should you integrate a different stablecoin?
It depends on the solution. I think our team is aware ‘crypto’ does not want to play with us, and frankly, we never wanted to play much with crypto either. It ́s just that USDC was a hell of a low-hanging fruit value proposition for our company. Seemed like a no-brainer, despite the polemical outcome.
Fortunately, very little work has to be done. We built everything modularly, and we had little reliance on Circle on the 5.0 and Cloud side. However, our fiat ramps were 100% based on them, and APIs from different providers work differently, so that’s something that might take a bit more time. We think the top-ups should be re-enabled in about two weeks, and we’re very close to offering the ability to buy gift cards or cash out to your bank account. For the last two features, we were using other providers anyway, so the Circle situation didn’t affect this one bit.
We ran a few surveys lately, and both our clients and users really value more fiat-based ramps than digital currency bridges, and honestly, this is the reality: all digital currency users have credit cards and bank accounts, but not all bank accounts or credit card holders have digital currency. After everything we learned in the past few years, I think the best course of action for our company is to run away from any association with digital currencies. We always wanted to just look and feel like regular money apps, and now it might be the time to seriously do it.
Technically, how will you be able to still allow the use of a tokenized stablecoin within the wallet?
Sure, 100%. The only difference would be which digital currency. The good thing is that very little work has to be done to adapt to a new one. Whatever it is, it will be run with our Tokenized infrastructure. We have tested it for months, and it’s hands down the best tokenization platform for fungible tokens by far. The rest are just do-it-yourself protocols. The gap businesses would feel by using something else compared to Tokenized is the Grand Canyon.
Before the team update on the new 5.0 approach, how would you have “just…change some APIs and some business deals that we already had in place in case something like this happened”?
We always have plan B and plan C in place for every service provider we use; in case something like this Circle situation happens, we need to keep offering a service. It was nice to see that a few minutes after we announced what happened, a few companies came to our rescue and offered us fast onboarding if needed, better rates, or just let us know that they were there willing to work with us.
Update on the status of HandCash 5.0 plans:
– The plan remains the same: add a USD based stablecoin inside of HandCash, and available to developers for their apps too
– Cash out to your bank account will be available
– Cash in with credit card will be back really soon
— HandCash (@handcashapp) February 2, 2023
Frankly, a native BSV/USD stablecoin has been promised to the BSV community by other parties for over 18 months now. How is this time different?
There is a lot of urgency in all companies using BSV to have it ready as soon as possible. I think a year ago, it was seen as more of a “good to have” convenience feature that “someone will take care of eventually.” Right now, companies feel this is a matter of life or death for their startups, and it has to be ready now.
I think it’s obvious BSV cannot compete in the same market or features as any other crypto, nor expect favorable treatment from this sector. We tried to fool ourselves, maybe thinking this was just Twitter nonsense, but the thing is that, for multiple reasons, the issue is deeper than most people think.
We hinted at this for years, but I must admit we thought eventually there would be a stablecoin on BSV without us having to deal with its creation, either. I don’t know to which degree we were complacent about it, or it was just common sense for us to focus on what we do instead of solving every single thing missing on BSV. Up to you to decide.
How “soon” will top-ups with credit/debit cards be available again?
We expect it to be in around two to three weeks. Working on this as we speak. We always wanted to rebuild the top-up system to make it web-based anyways, so this pushed us to do it sooner.
Will stablecoin deposits from and withdrawals to other blockchains still be a feature in the 5.0 update?
I think it’s clear that we need to focus on fiat ramps instead, and if we can do this easily and in an inexpensive manner, then OK, but it still has to be seen if people from other blockchains want to use their coins as money instead of just gambling.
Thank you, Alex, for taking the time to answer my questions. I hope the readers learn more about the impact of Circle’s actions and HandCash’s plans moving forward.
Thank you, Joshua. I hope this helps clarify the situation and where our minds are at the time.
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