The peer to peer exchange recently announced that it has decided to venture into Venezuela.
Venezuela has been going through an economic crisis and a volatile currency market.
While most financial and crypto companies prefer to stay away from markets like Venezuela, Paxful is taking the plunge with both feet. The company plans to open offices in Venezuela by the end of September. The South American country is plagued by hyperinflation and Paxful thinks it is a huge potential market for its services. To assist in this drive, the company will be releasing an Android app in October.
Paxful
Paxful’s co-founder, Ray Youssef, thinks that the country is ripe for cryptocurrency market infiltration. It helps that a lot of countries like Venezuela have plentiful access to mobile phones – though they are lacking in cryptocurrency presence.
In a statement, Youssef said
Underbanked, unbanked or people in a desperate situation, such as with market inflation. Those are the markets where Paxful can add the most value and where bitcoin actually adds the most value for people.
Duplicating African Success
Paxful is hoping to duplicate its success in Africa, which has the world’s largest population of unbanked individuals. Paxful has had great success in the African market and is positive that it can replicate its success in Venezuela.
Internal data revealed by Paxful shows that June saw 772,000 bitcoin trades in Nigeria alone. The average size of Nigerian transactions is equal to $64. Ghana is another successful market, with 50,000 bitcoin trades for the month. Paxful boasts of getting 2 million users since it opened. The success of the business looks assured with more transactions coming in daily.
Paxful’s business model has them charge a 1 percent fee on all trades that happen on the exchange.
There are already several exchanges like Paxful serving the market. This includes Binance, LocalBitcoins, KuCoin and Luno. These companies serve economies where cash is hard to find, making them a useful tool for those who want to buy and sell. Considering the volatility of African currencies, having cryptocurrencies as an option makes it possible for remittances to happen.
The initial move for Paxful in Venezuela is to do some market research on how to implement its platform as a medium of exchange which meets Youssef’s vision for the use of cryptocurrencies. Considering how difficult it is to use cash now in Venezuela, maybe bitcoin is the answer to ensuring a solid standard.