Paxful, a peer-to-peer platform for buying and selling cryptocurrency, for the first time outperformed LocalBitcoins in terms of transaction volume. This was facilitated by tighter identification requirements and ban on cash transactions at LocalBitcoins.
According to Coin.dance, Paxful is currently the leading p2p platform for buying and selling bitcoins in terms of global weekly trading volume. In the week ending June 13, the volume of transactions at Paxful amounted to 4,361 BTC ($42.5 million), while 4094 BTC ($ 40 million) were exchanged at LocalBitcoins. In the week ending June 6, Paxful also outperformed LocalBitcoins: the weekly trading volume on Paxful was $42.8 million, with LocalBitcoins reaching only $41.7 million.
P2P exchanges are trading platforms that allow users to buy and sell digital assets directly from each other using various payment methods.
Balance change in the p2p platform market was facilitated by tighter regulation of digital assets in the European Union. In 2019, LocalBitcoins toughened its requirements for verification and identification of users in accordance with the new European directive designed to combat money laundering and terrorism financing. LocalBitcoins also stopped supporting cash payments in accordance with the regulatory requirements of Finland, where the platform operator is registered. This led to an outflow of traders who preferred this method of payment.
However, this did not stop LocalBitcoins from expanding its user base by 1.46 new accounts in 2019 and increasing revenue by 10% to $29.48 million. Trading volume in 2019 amounted to 2.48 billion euros ($ 2.79 billion). Last year, the platform completed 15.6 million transactions and had 913,000 active traders.