Demand for white label solutions in the cryptocurrency domain is growing as they provide new means of launching a crypto exchange with a minimum investment while still maximizing their potential. Below we explore what you need to consider before starting a crypto exchange.
First, differentiate between a white label software license and a business license. A business provides a complete enterprise package also, including the software package. On the other hand, white-label software is an unbranded technological package that can be integrated with any existing business model. It offers businesses the possibility of delivering their clients new ways of interacting with crypto.
Exchange owners should first identify their audience’s needs, pains, habits, and challenges. Then, depending on their audience, an exchange should meet users’ expectations, and white label solutions can contain customizable UX functions. That way, exchanges are able to cater their product to any specific audience.
Choose the Regulation
The location where you want to launch your exchange can impact your bottom line profit, taxation, or legality of your exchange. It also limits the type of financial products your crypto exchange can offer. Thus, exchange owners should always monitor regulatory developments to have all documents needed to launch a crypto exchange successfully.
Establishing platform liquidity is an essential component of having a sustainable crypto exchange. The faster an exchange can execute orders, the more reliable it becomes. Exchanges can opt for a prime of prime offer where they partner with external liquidity providers in exchange for trade commissions. Another approach is selecting an NBPL method where the exchange aggregates different prices from multiple providers. The second option decreases commissions but relies on platform-embedded software.
To be recognized as a trusted provider, crypto exchanges should implement strict security features that adhere to regulatory measures. For example, a crypto exchange should implement a KYC to verify a user’s identity to prevent fraudsters and see if traders can legally trade. KYT or know your transaction helps track suspicious or sanctioned withdrawal methods or transactions. Exchange should also implement AML procedures to adhere to national regulations.
Once you’ve ticked all the boxes, you should start looking for a vendor. Finding a reliable vendor is key because you are committed to their product in the long term. Always conduct thorough research, and ask existing clients about their experience, as your white label platform’s technical capabilities can affect your business’s growth potential.
Soft-FX has been a key software provider for already established exchanges. Sign-up for our white label exchange service and become part of the next crypto exchange revolution.
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