Requirements For Starting a Cryptocurrency Exchange Business
Posted By : Anirudh Bhardwaj | 15-Nov-2019
Cryptocurrencies have become increasingly popular and several MNCs are investing huge amounts of money in expanding their crypto businesses. That being said, all types of cryptocurrency businesses are thriving on crypto exchanges and trade/exchange platforms. According to Forbes, there are over 1600 mainstream cryptocurrency exchanges worldwide with a combined market cap of over $289 bln.
Increased public awareness and openness to cryptocurrencies in many countries is all the more reason to build a decentralized crypto exchange. However, building an effective cryptocurrency exchange software from scratch requires fair planning, a well-defined roadmap, and thorough assessment of resources. This blog post highlights the essential elements of cryptocurrency exchange development and how businesses can benefit from the process.
Once you have a clear idea in place, the first step is to understand the regulatory demands for your crypto project. It is, therefore critical to seek legal counsel and carefully examine the licensing requirements of various jurisdictions. For successfully running your crypto exchange, you will need to obtain a requisite license in all the areas where you plan to operate. The regulatory requirements for cryptocurrency exchanges vary from country to country and may be different for states or provinces within a country.
Create a Project Roadmap
Before starting the development phase, you must have a clearly defined project roadmap to attract investors and raise funds for the project. The roadmap provides a strategic overview of your crypto project along with the time estimation for each phase. Besides, a roadmap typically contains objectives, important milestones, deliverables, and resources required for the development process. A well-defined roadmap establishes the essential link between project managers and stakeholders and keeps them up-to-date with the latest progress.
You must also create a technical document and a white paper that provides detailed information about the project, its features, and potential benefits. We also recommend creating a brief executive summary which makes it easy for investors to understand the core idea behind the project.
Find a Technology Partner
The most important step is to find a prominent cryptocurrency exchange development company to set the plan into action. Since you are going to rely on this company for the entire development phase, you must be very careful with the decision. Below are the key parameters that must be considered while choosing a cryptocurrency exchange development company.
- Check their client portfolio and total experience in cryptocurrency exchange development
- Consider their technology strength and compare with multiple companies in the same niche
- Analyze their industry potential and brand identity
- Check if their development costs fit in your budget
- Try to find companies that offer turnkey cryptocurrency exchange development services to save time and money
While considering the above parameters, shortlist 4-5 companies that are the best fit for your project requirements. Contact these companies and ask for a demo and then make the final call.
Collaborate With Payment a Processor
Later in the development stage, you will also need to collaborate with several payment processors for facilitating cryptocurrency transactions. Choosing a reliable payment processor is just as important as selecting the cryptocurrencies for your exchange. To easily gain users’ trust, you must have multiple payment processors integrated into your exchange website.
Each payment processor has a different fee structure in different countries. Therefore, a complete assessment is required while choosing the right payment processor for your crypto exchange platform. To protect your exchange against cyber attacks and online threats, you must ensure that your payment processor is PCI DDS-compliant.
Find Crypto Exchange Partners
The most crucial element of a successful cryptocurrency exchange development is liquidity. In the absence of sufficient trading volume, users will not be interested in your exchange platform. It is therefore essential to link your exchange with other prominent crypto exchanges to enhance its liquidity and build trust. It is also advisable to run a series of promotional campaigns weeks before the launch to create brand awareness.
Launch The First Beta Version
By the time you reach this step, you have successfully developed your crypto exchange as per the project roadmap. It means you have obtained all the requisite licenses, availed development services from a technology company, integrated with essential payment systems and everything in between. Now you are ready to launch the first beta version. It is also the best way to test your exchange platform on a variety of performance metrics. Most companies release several beta versions of their cryptocurrency exchange before launching the final version.
Why Choose Oodles Technologies For Cryptocurrency Exchange Development?
We are a seasoned cryptocurrency exchange development company that provides complete solutions for building high-performance trade/exchange platforms for popular cryptocurrencies. Our end-to-end cryptocurrency exchange development services enhance user engagement with intuitive UI for increased liquidity. We also provide turnkey crypto exchange development solutions to accelerate the development process and reduce project costs.
Anirudh is a content strategist and marketing head with considerable experience in handling technical projects related to next-gen technologies like ERP, SaaS, business intelligence, IoT, big data, and blockchain.