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This article will discuss the key points in cryptocurrency exchange software development. We also provide a list with white-label cryptocurrency exchange software.
Let's now talk about creating a white label solution to a cryptocurrency exchange. We will also be discussing the various steps to follow in order for you to get started.
1. Choosing between two white label solution
There are two options: white-label license and white-label solution.
A white label software license allows you to have a ready-to go solution for your business. It can be a hardware or software component, which is delivered unbranded. A license is required to purchase ready-made software.
White label crypto exchange software is software delivered to customers without the need for a brand. It helps users run their business more efficiently and effectively. It can be used for those who have a functional business plan or have specific requirements.
2. Find niches and target audiences
Before you work with a technology partner, ensure that you have a clear understanding about the business type you intend to operate. This will enable you to make informed decisions when it comes to the development of your software framework.
The availability of liquidity and security are two of the most important factors you need to consider. The ability to create white label exchanges will enable you to reach more potential customers. You must consider other factors as well, including the security and liquidity requirements of the exchange.
A white label exchange that is fully functional and meets all the requirements of its customers will be able to achieve its full potential.
3. Choose the regulation
It is vital that the financial industry regulation be in place to ensure your success. This regulates many aspects of your business, including the taxation and business models you offer customers. Clients from China cannot trade Bitcoin because of bans in certain countries.
There are many laws that govern cryptocurrency and exchange transactions. They vary depending on where they are implemented and what regulators are in place. It is important to monitor the publication of legal documents related to the cryptocurrency industry because of its rapid growth.
4. The liquidity management process
When you are setting up a white label cryptocurrency platform, one of the most important things to consider is how liquidity will work. This allows users to purchase and sell assets at attractive prices. They will be able to execute their orders quicker if they have the right amount of liquidity.
Prime of prime arrangements are one of the best ways to create a white-label cryptocurrency platform. This is when you work with an external vendor who provides Tier 1 liquidity.
A NBLP is a non-bank liquidity provider. This arrangement allows cryptocurrency exchanges to offer their users prices collected from various liquidity providers. This method is not like Tier 1 vendors in that the exchange does not have to pay commissions.
5. KYC and AML Protocols
You must ensure that your white label cryptocurrency exchange is safe before you can open it. You can do this by establishing a company that will compile the necessary procedures.
KYC (Know Your Customer) - Every person who wishes to trade on a cryptocurrency exchange must be verified that they are legal. This can help to keep track of hackers and fraudsters.
KYT (Know Your Transactions) - This is a process that checks the source of funds and transactions made by a user on a cryptocurrency exchange. If the source is suspicious, it can block funds or block transactions.
AML (Anti-Money Laundering) - Cryptocurrency exchanges must follow strict regulations in most countries to prevent money laundering and terrorist financing. In the US, for example, an exchange must have an anti-money laundering officer.
6. Locating the vendor
Once you have a clear idea of your business, it is time to look for a partner. You should thoroughly investigate their backgrounds and give them all the information. You should also ensure that the technology provider you choose is compatible with your business's requirements. You should not only conduct a background check but also inquire about their technical abilities.
