With the digital economy reaching new heights due to the emphasis on rapid connectivity, Crypto exchanges are making a huge impact. Cryptocurrencies offer a plethora of benefits to the traders in the form of scalability, swiftness, and high-end security. They act as a viable alternative to physical money which is not performing quite well due to the economic downturn.
Understanding the meaning of Cryptocurrency exchanges
They function as real-time platforms for the exchange of cryptocurrencies between buyers and sellers based on market value. Both crypto to crypto and crypto to fiat transactions are permitted. Blockchain technology helps in securing the platform by providing a safe trading experience through immutability and anonymity to the users. The different kinds of crypto exchanges are centralized, decentralized, and hybrid.
The general procedure to follow during Cryptocurrency exchange development
- The operational license has to be obtained according to the location where the firm wants to launch its crypto exchange business.
- Generate enough funds for the smooth execution of the operations.
- Gather all the technical requirements.
- Hire an experienced technical team.
- Boosting liquidity for the platform by connecting the exchange with other well-known external exchanges by forming API’s.
- Partnering with banks or financial institutions to create a payment gateway for processing transactions easily.
- Implementation of customized features for the traders backed up by robust security measures into the exchange.
- Rigorous testing of the exchange platform to eliminate any major bugs and glitches.
- Undertaking extensive marketing campaigns across different communication channels ahead of the official launch of the exchange.
- Implementing constant maintenance and audits to ensure interruption-free functioning of the exchange.
It is ideal to obtain a reliable white label crypto exchange software from an experienced exchange development company. They come with all the in-built features and can be readily launched into the market. The firm can also customize its brand name, logo, UI/UX design, and color theme. Hence, they enhance the entire business experience making it hassle-free.
Benefits rendered by a White label crypto exchange software for an enterprise
- It saves developmental costs for a firm as it is readily available without any delays.
- They are well-equipped with the necessary technical expertise and perfectly satisfy the legal guidelines.
- They are highly flexible and convenient to use. Bugs can be resolved easily.
- They can be customized according to the preferences of the user.
- Constant maintenance support is also needed as it is rigorously pre-tested before delivery. Hence, high reliability is guaranteed.
The critical features to integrate into the process of Cryptocurrency exchange development
- Support for the leading cryptocurrencies and fiat currencies in the market.
- Technical support rendered in multiple languages to cater to the global user base effectively.
- A secure wallet (hot and cold) for storing the coins of investors safely.
- Automated KYC/AML verification to ensure the legitimacy and authenticity of the users.
- An accurate matching engine for handling the huge number of orders made by the traders.
- A robust admin panel for managing the daily operations of the exchange smoothly.
- Speedy processing of transactions without any hassle.
- Integration of smart contracts for automating operations to improve its efficiency and cut down costs by eliminating human intervention.
- Multi-factor authentication for the secure exchange of information between the users.
- A reward-oriented referral program for users to increase traffic on the exchange.
Factors to consider while establishing a cryptocurrency exchange
- Geographical location – Since not every country in the world is friendly towards cryptocurrencies, it is best to start a cryptocurrency exchange in a location where the laws are favorable and conducive. If a user cannot legally trade on an exchange, his signing up becomes a waste. Many countries like China, Saudi Arabia, and South Korea are cracking down rigorously on cryptocurrency exchanges as they strongly view it as a threat to their economic and financial freedom.
- Trading volume and level of liquidity – If a cryptocurrency exchange possesses a large trading volume, investors would have the confidence to put their money without any apprehensions. Liquidity will help in ease of buying and selling cryptos without influencing the market price of the asset. Centralized exchanges are highly liquid and fill orders faster when compared to decentralized exchanges. They have the required support mechanisms as well as the infrastructure in place to support a huge volume of orders.
- Availability of security and anonymity – With an increasing number of hacking attacks amounting to millions of dollars, security should be the topmost priority for developers building crypto exchange. Centralized exchanges are vulnerable to phishing scams and hacks. Decentralized exchanges are more secure than centralized exchanges. Steps like two-factor authentication, anonymous sign-ups, jail login, spot KYC/AML verification, and password-protected user access must be implemented without fail on the platform.
How to open an account on a Cryptocurrency exchange?
Extensive identity verification will be carried out for every user interested in setting up an account on a Cryptocurrency exchange due to regulatory controls and government oversight. KYC (Know Your Customer) and AML (Anti Money Laundering) checks will be imposed at every stage. This is done to prevent fraud and illegal trading activities. Both proofs of identity and proof of address documents would be needed as part of the exchange’s due diligence process. It will vary from one exchange to another depending on their location.
Which exchange is right for a trader?
Each trader needs to identify their specific needs. No exchange can fit every trader’s requirements with their services. The number of cryptocurrencies and trading pairs available would differ from one exchange to another. Geographical restrictions would also apply depending on the physical location of the user. Exchanges may or may not accept deposits made in fiat currency. Hence choose a reliable cryptocurrency exchange that suits your investing and trading goals to perfection. At the end of the day, your digital trading experience must be enhanced.
Some of the popular cryptocurrency exchanges currently operating in the market are Coinbase, Gemini, Kraken, Bittrex, Binance, and Shapeshift. They support most of the leading cryptocurrencies, available in most of the countries, accept fiat currency deposits, highly user-friendly, have robust security measures and possess huge trading volumes.
Hence, consider all the above aspects and indulge in well-rounded Cryptocurrency exchange development for transforming the operations of your enterprise.