Last week, online precious metals retailer Amagi Metals announced that it will no longer be directly accepting U.S. dollars for purchases of bullion and coins. The move will not take effect immediately, with dollar-backed purchases enabled through the end of 2016. Amagi is often cited among the first generation of bitcoin-accepting merchants, adopting a bitcoin-purchasing option in late 2012.
The company’s blog post about the long-term move suggests that Amagi’s plan is at least partially ideological.
Since the dollar was decoupled from gold in 1971, it has lost 97% of its value compared to the yellow metal and 83% of its domestic purchasing power, and the trend shows no signs of stopping. Both investors and foreign governments have begun to lose confidence in the dollar’s future…and so has Amagi Metals.
The plan also appears to be driven somewhat by buying trends and the costs of credit card-based transactions. The company claims that bitcoin now accounts for over 40% of their customer payments, and notes that the “miniscule fees and fast transaction time” have made those transactions more cost-efficient than credit cards and checks. The company admitted that that price volatility and regulatory uncertainty could be problematic factors as the cryptocurrency network matures, but expressed belief that bitcoin and other digital currencies will become “another form of sound money” in coming years.
The announcement has caused significant buzz on bitcoin forums, where several practical questions, such as how the company will price their offerings, remain open. Amagi plans on hosting a Reddit Ask Me Anything (AMA) next week to respond to specific concerns.
Excitement aside, Amagi is hedging its bets a little. The blog post noted that the company will provide a means for customers to “convert their fiat money to cryptocurrency” on the Amagi website at the current spot price.