Peer-to-peer marketplace Paxful has added gold to its list of tradable assets. Customers can now purchase gold or exchange it for bitcoin.
Paxful customers can now buy and sell gold for Bitcoin. The P2P exchange works by pairing buyers and sellers looking to make a trade. Both parties come to an agreement individually before making the transaction.
The peer-to-peer exchange was once notorious for its lack of know-your-customer (KYC) protocols, allowing its users to make trades anonymously. Last year, however, the exchange finally buckled under the pressure of “tremendous” fraud and added KYC requirements.
In this case, all parties involved in gold transactions of $50 or more are required to submit to a full identity and address verification process. Additional verification may also be required from individuals looking to sell gold. Bitcoin remains in escrow with Paxful until trades are completed, and the delivery of physical gold must be completed within 21 days.
Paxful’s announcement comes at a time when both gold and Bitcoin have dropped in price due to the effects on the markets stemming from the coronavirus pandemic. These drops have given rise to doubts about their statuses as “safe haven” assets.
But Paxful CEO Ray Youssef doesn’t think it’s fair to judge either gold or Bitcoin too harshly during these times. In an interview with Decrypt, he explained that virtually every tradeable asset is likely to behave in an unpredictable manner whenever global panic ensues.
“People who have different positions in the equity market are using different asset types to cut their losses,” he said. “Even in these trying times, gold did not face super dramatic dips in prices which is a testament to its resilience. Gold traditionally has been a store of value and associated with finance for many years for its unique attributes.”
Youssef said that adding gold to Paxful was part of a “broader vision” to bring a new dimension to peer-to-peer finance. The move makes perfect sense, he said, given that both gold and Bitcoin share similar principles in terms of scarcity, utility and uniformity.
“Paxful is the only peer-to-peer marketplace that services gold,” said Youssef. “Gold marks the start of other goods and services as a method for payment in Paxful.”