Start Your Own Crypto Exchange

Can You Start Your Own Cryptocurrency Exchange?

So, you wish to start your own cryptocurrency exchange. That’s great!

Well, if you are confused and willing to know the right path for creating your own bitcoin exchange, then you’ve reached the perfect place.

This article is intended to provide you with the most reliable approach for creating a cryptocurrency exchange. Indeed, it’s not easy, but it’s not difficult too.

Let’s get the ball rolling!

Bitcoin Exchange: How to Start One?

Starting a bitcoin exchange usually involves 6 basic steps. Let’s discover each of them in depth.

1. Set up the operational extent of your exchange

Even if you wish to operate worldwide or confine yourself to a particular region, you will often be required to get the necessary licensing as well as approvals for your firm to open a bitcoin exchange in accordance with your operational scope.

However, laws vary from region-to-region. Hence, consult with a legal person about the licensing and compliance with local laws as well as regulations.

You May Also Read: Is Kraken A Good Cryptocurrency Exchange?

2. Survey the nation’s guidelines and compliance necessities

Nearly all governments need entities involved in the currency exchange business adhering to the KYC norms. KYC is a process through which a business verifies the identity of its consumers via government-issued identity cards or passports.

The aim here is to discourage money laundering. Just make sure that you adhere to your nation’s KYC norms and integrate a perfect customer verification procedure into your exchange.

3. Partner with Payment Processor

You will have to partner with a payment provider or a bank to process payments through fiat currency. Picking a reliable bank with a host of online facilities can turn out to be a good choice. And, it should be since this is more relevant to the development and under-developed economies where most banks don’t have a facility for initiating an instant bank transaction online.

Partnering with a payment processor will offer convenience to your customers.

You May Also Read: How Do Cryptocurrency Exchanges Work?

4. Create Liquidity

Any cryptocurrency exchange requires liquidity for a successful operation. Consumers hesitate to order or even deposit funds until they see a full order book and trading activity.

New exchanges generally face liquidity issues. There are 3 ways to kick-start your liquidity –

  1. You can simulate your trading activity inside your exchange by buying/selling between two artificial accounts on your own exchange.
  2. You can use an API interface that connects your exchange to another existing exchange.
  3. You can even join an entire network of crypto exchanges like Trust-Deposit that will tie together the liquidity of all the cryptocurrency exchanges inside its network.

The bigger is the network, the better the liquidity.

5. High Security for Consumer Data

Exchanges need topnotch security to make sure that both the exchange operators’ as well as his traders’ funds remain secure. This also needs to be applied to your consumers’ private data that includes KYC details as well as bank account details.

You May Also Read: Top 10 Cryptocurrency Exchanges for 2019

6. Set up customer support channels

At last, customer support is a vital component of a successful exchange. A dedicated staff is needed to approve KYC requests, processing the deposit and withdrawal of fiat currency, answering customer complaints, etc. A swift consumers support mechanism makes sure that your customers begin trading and generating revenues for your exchange from the very moment of signing up.

These are the important steps to begin your own cryptocurrency exchange.

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