If you’re looking to start your own cryptocurrency brokerage or exchange, you aren’t the only one. We say this because the overall cryptocurrency market is projected to reach USD 1.4 billion by the year 2024. The world of cryptocurrency is fast, dynamic and not for the slow-paced! Although it’s a big boom, it’s not rocket science. With a clear understanding of the marketplace and extensive research, you can pave your path to success.
The blockchain system on which cryptocurrency is built has piqued the interest of many, especially the Millenials. They’re reshaping the entire financial trend because cryptocurrency offers something traditional banks cannot – The heightened transactional security, fraud protection, low fees, growing acceptance, and decentralized systems.
In addition, those who don’t have access to banks can rely on cryptocurrency to exchange and cash in almost immediately. Such is the power of Blockchain ensuring growth ahead and dominating our future.
But, what does it actually take to start your own cryptocurrency exchange or become a cryptocurrency broker?
Before we get started with the “how”, let’s try and understand what we are getting into.
Are you going to launch a Cryptocurrency Exchange or a Cryptocurrency Brokerage (Trading solutions)? People often confuse the two. Though the process of setting up might be the same, the functionality is not.
What is a Cryptocurrency Exchange?
A traditional Crypto Currency Exchange is similar to Stock Exchange Trading, where a user can buy or sell based on the current market price of the cryptocurrency. The exchange will act as a middle-man and will charge a small fee for each exchange/trade. Some traders exchange FIAT Currency (like USD or EUR) for Cryptocurrency, while other traders exchange between two Cryptocurrencies.
What is a Cryptocurrency Brokerage?
With the Crypto Brokerage, your funds are traded through a dealer’s network, as opposed to the central exchange and this is also known as Over the Counter (OTC) market. This brokerage finds sellers or buyers who individually hold a large pool of cryptocurrencies and pair them for sale. This is more flexible and more convenient with a settlement period that is generally faster than that of a crypto exchange.
Now that you know which one you are going to start, let’s list down the steps to set it up!
(We aren’t including the basics of setting up any business, like having a plan or attaining funding. We’d like to believe that you have that covered)
Getting a license:
Once you have finalized the regions you would like to operate in, please ensure that you have understood the regulations in each of those regions and obtained the necessary licenses. Since the idea of cryptocurrencies still does not go well with a lot of countries, the list of countries you will have to license yourself in won’t be very long. Regardless, it is imperative that you have a legal expert who has covered this for you.
Similarly, a unified back-office that can communicate with your CRM, crypto trading platforms, and the trader’s room is a must-have. This ensures the entire process, right from customer on-boarding to everyday operations run smoothly.
Crypto CRM & Back-Office:
If you haven’t been living under a rock for the last few years, you will know that an efficient CRM is the backbone of most businesses, more so in this business. Be it a cryptocurrency exchange or brokerage, you absolutely must have a robust CRM. One that is designed for your business and allows for seamless communication and integration with various other tools that will be a part of your business.
Trader’s Room / Client Cabinet:
Trader’s Room aka Client Cabinet is a platform where customers can manage their trading accounts at ease.
A good client cabinet must have the following features
A clean and user-friendly interface
Simple onboarding process
Payment integration (For withdrawals & deposits)
E-Wallets
CRM integration
Platform agnostic (should be able to integrate with any trading platform)
Trading history and comprehensive reports
Liquidity:
In order to gain the trust of potential customers in a way that they feel comfortable to engage with your exchange, you must showcase sufficient liquidity. Partnering with a crypto liquidity provider who is able to offer a deep liquidity pool is a good option for starters. Most importantly, choose a provider who will charge you a flat fee and not based on trade volumes.
ICO funding (ICO and token creation):
This is not a mandatory step, but optional. You may choose to launch an ICO platform to create your own coins. You can have your tokens created on an existing platform such as Bitcoin or Ethereum. This is possible by partnering with a technology provider who can create the ICO platform as well as the tokens.
This acts as a fundraising platform to attract investors who may be interested to buy into your offering. Choose a provider who can create a multi-currency ICO platform to ensure your future investors can either pay with fiat currency or with pre-existing digital tokens like ether, bitcoin or altcoin.
Talk to the Sanfrix ICO expert today, to explore this amazing possibility!
Finding the Right Technology Provider:
Your ideal technology provider is one that provides you with turnkey cryptocurrency solutions that are designed to your requirement and are pretty much plug & play.
Choose a provider that can offer Whitelabel crypto solutions, the ones that specialize in developing custom cryptocurrency exchange solutions. This will save you a lot of time and money ensuring fast deployment in a fraction of the cost.
Implementing Payment Solutions:
You need to establish institutional relationships with a Payment Service Provider to have the payment gateway integrated into your Crypto Trader’s Room / Client Cabinet. Therefore, you must use one that is trustworthy and is capable of hosting online payments where the speed of transactions, clearance, and settlement of funds is not compromised.
Also, a payment solution with a low transaction rate will offer more traders to your platform. Some solution providers may have hidden fees that you have to watch out for before you sign a contract with any payment processor.
Security:
Given that cryptocurrency is a major target for hackers and that the number of cyber-attacks and data breaches are increasing day by day, implementing the best security practices and technology is an integral component of ensuring that your crypto business is safe and secure.
Going Live & Beta Testing:
Now that you have found the right technology provider, figured out your payment solutions, and taken care of security, it is time to test your site to its full range and explore every aspect of it to ensure that there are no flaws in the system before you onboard your first customer.
Marketing & PR:
Though we mentioned that we won’t be covering the regular steps that go into setting up every business, we would like to add a quick note to stress the importance of marketing and PR in cryptocurrency business. Though most exchanges might not initially have a marketing budget and use a social media approach, it is advisable that you do some digital marketing outside of social media to be able to build yourself as a brand and put yourself out there with the help of the Public Relation experts in the industry.
Ongoing Operations:
Once you have successfully launched and are up and running, it is important to continue having a strategic approach to your day to day activities while maintaining ongoing compliance. We stress again on the importance of following regulations not only in the jurisdictions that you operate in but also in all the regions that your traders are based in.
A crypto brokerage solution provider like Sanfrix can cover all the above requirements for you and do more! You receive end to end support to start your own crypto brokerage or exchange.
Here are some solutions to name a few:
Company Incorporation & Licensing
Payment Gateway Integration
Website Development
ICO & Token creation
Crypto Trading Platforms (Web, Mobile & Tablet)
Crypto CRM & Back-Office
Crypto Trader’s Room / Client Cabinet
Infrastructure Upgrade
Consultation Services
Custom Development
Go on, get the whole picture and ask for a demo today!
visit : sanfrix .com
