Cryptocurrency such as Bitcoin is the area of interest for many. And why not so when it is providing people with a greater return on investments.
This is the reason why you often see online advertisements about Bitcoin Institute. This is the reason why people are spending a lot of money on gaining knowledge about cryptocurrencies.
If you too are interested in the same, here is a complete guide on how to start a crypto exchange?
Well, starting a Bitcoin or crypto exchange demands 6 steps.
Step 1: You must know what is the operational scope of your exchange.
You must be clear with whether you want to confine yourself to the local market or you want to operate worldwide. This matters because you are required to get licenses and approvals for starting a crypto exchange. And you know well that laws vary from place to place. You can consult this with a Bitcoin expert UK or with another as per your choice and place.
Step 2: Beware of the regulations and compliance requirements.
There is a demand from almost all governments to have entities that are involved in the exchange business. This is basically to adhere to the “Know Your Customers” or what we generally called KYC norms. It is actually a process in which the business verifies the identity of its customers. This takes place through government-issued ID cards or passports. The idea behind this KYC is to prevent and discourage money laundering.
You must take this thing into consideration and go with a suitable customer verification procedure for your crypto exchange. If not done correctly, you may even be charged legally for the same.
Step 3: Get into partnership with your bank or the Payment Processor.
If you have to process payments via fiat currency you have to get involved in a partnership with a Bank or Payment Provider. It is good to go with a bank that is trustworthy and holds a wide range of online facilities. This will prove to be more relevant in developing and underdeveloped economies. This is so because most banks over there do not have the facility to initiate an instant online bank transaction.
Moreover, the transactions take up to 2 days for the settlement. In this case, partnering with the bank that has fast clearance and settlement of funds will provide a good experience to your customers.
Step 4: Don’t forget to establish transaction history and liquidity on your exchange.
If you want your exchange to operate successfully, you are required to have liquidity. It matters a lot as most customers view full Order Book and trading activities before placing orders or depositing funds.
You can go with 3 established ways to start liquidity.
Step 5: Implement high-grade security for customer data and transactions.
If you are anxious about security for the exchange operator’s and his trader’s fund, you are required to go with best-in-the-class security. This also includes your customer’s private data that includes KYC and bank details.
This is so because anytime you encounter a security breach you will not only lose your customers but your business too. And you know once you lose it you are not going to earn that trust in the nearby future.
Step 6: 24X7 customer support.
Ok so now you have everything legal, you have gone through various rules and regulations and implement them effectively. You have gone with top-notch security. But if you fail to satisfy your customers with their queries you will still not be able to make it.
This is so because there are a lot of customers that are having various doubts. In this case, if you are not able to approve their KYC requests on time, or you fail to answer their queries properly, they will leave you for some better platform. You are required to carry a swift customer support mechanism to earn their loyalty.
After going through these 6 steps it must be clear in your mind what to do next. If not, you can again read it to find the answers that you are looking for. Once you are filled with knowledge you can make wise decisions of your own. This thing matters, because cryptocurrency is something that requires in-depth knowledge before the option of successful business comes to the table.