Precious metal merchant Amagi Metals currently accepts dollars for precious metal purchases such as gold and silver coins and bars. However, that will change by the end of 2016.
No More Dollars
The company announced on August 15, 2014 that it will no longer accept US Dollars by the end of 2016. Only digital currencies like bitcoin or litecoin, also known as cryptocurrencies, will be accepted. To purchase gold and silver after 2016, US Dollar holders will need to convert their fiat currency into the more stable digital currencies before exchanging it for physical metals.
According to the Amagi Metals press release: “We want to be a leader in the sound money movement,” CEO Stephen Macaskill says. “With the adoption of cryptocurrencies increasing every day, their viability is virtually assured. History shows that paper currency, backed by nothing of value, will ultimately fail. It’s only a matter of time until no one will be accepting the dollar. By trading exclusively in cryptocurrencies, we’ll still be in business when that time comes.”
Accepting bitcoin and litecoin is not new for Amagi. They have been accepting cryptocurrencies since November of 2012. Bitcoin transactions now represent over 40% of the company’s customer payments for metals.
Why Accept Cryptocurrencies?
Cryptocurrencies like bitcoin incur near zero transaction fees (about 0.1% or less) and those transactions occur almost instantly. Bitcoin transaction occur instantly and are confirmed in about an hour, at which point the funds are released to the merchant. In addition, bitcoin allows no chargebacks, a concern if a client were to receive their gold or silver and then file a dispute on their credit card payment affecting the Amagi’s ability to access the funds for the product they already shipped.
According to the press release, Amagi Metals state that although many people may be skeptical about bitcoin, especially due to its recent volatility and developing regulations, they see the technology of cryptocurrencies as one that is maturing rapidly. Given this development, they believe bitcoin and cryptocurrencies could represent another form of sound money, such as gold and silver, in the near future and are effectively betting on that outcome.
What About Dollars?
Amagi is planning to offer a dollar to bitcoin exchange capability for those that do not already hold cryptocurrencies. It will be a two-step process for holders of US Dollars, yet will allow them to do business with Amagi and protect the company from the risk of holding dollars.
People looking to buy gold and silver from Amagi are able to do so directly with bitcoin today and will continue to be able to do so in the future. Dollar holders will need to take another step to convert their dollars into bitcoins first — as long as bitcoin holders are willing to exchange them for US Dollars, that is.