Bitcoin peer-to-peer decentralized marketplace, LocalBitcoins, has continued to maintain steady volumes despite the change in policies around the world that now require the user to complete a KYC procedure and even banned cash transactions.
The policy change was undertaken in accordance with new European anti-money laundering directives. In fact, the policy change was made in June 2019 and people thought it would really hamper the business and customer inflow.
However, the data suggest that policy changes didn't really have any negative impact on the peer-to-peer exchange’s volume. In fact, the trading volume on the platform is well on-par with centralized exchanges such as OKEx and Coinbase, as per a data set from Nomics.
The data set revealed that in the past 12 months, OKEx and Coinbase have seen a volume drop of 30% and 45% respectively, while LocalBitcoins in the same time frame saw a decline of 27% which is less than both the prominent exchanges.
One of the spokespeople from the peer-to-peer exchange revealed that cash transactions on the platform were minimal and constituted only 0.5% of the total volume on the exchange. Thus removing the cash transaction option did not really have any long-lasting impact.
LocalBitcoins was created back in 2012 as a peer-to-peer exchange where anyone can buy/sell their bitcoins without the need to create an identity-based account, The main motive was to avail banking and financial services to the underprivileged who cannot get access to banks.
Developing Nations With Financial Troubles Contribute Largest to the Volumes
LocalBitcoins registered elevated transaction volumes from developing nations that are facing financial troubles due to various reasons. For example, transaction volumes recorded from Argentina, Colombia, and Venezuela have risen by 51%, 46%, and 125% respectively in the past couple of months.
Thus, it is quite clear from these statistics that LocalBitcoins volume hasn’t degraded after the policy change which many believe would bring the platform’s doom. In fact, since the policy change, the exchange has managed to keep its trading volume in-line with mainstream centralized crypto exchanges These statistics also prove that people do not really care about privacy for as long as they get to trade bitcoin.