A Polish company with a Crypto Exchange license is the best option for a cryptocurrency exchange activity
Since November 2021 Poland grants Cryptocurrency Exchange licenses. With this type of license, Polish companies can freely exchange cryptocurrencies with FIAT currencies and vice versa. It is necessary to create a company from Poland with the requirements described on the page of this product. In addition, it is necessary to acquire software for managing transactions. The cost of these partnerships includes the license and does not include the cost of software or platform development.
How to create your own cryptocurrency exchange?
Cryptocurrency exchanges are online platforms where users exchange cryptocurrencies to FIAT money and other cryptos
Platforms of cryptocurrency exchanges have lower commissions compared to other methods of exchanges that existed in the past. Is it possible to create your own exchange? Yes, and in this article we explain how.
How an exchange works
The operation of any exchange begins with the formation of virtual wallets. These wallets store orders for the purchase and sale of assets based on prices agreed between the parties. The exchange collects a commission for fulfilling the orders requested by the users.
Types of exchanges
Experts have classified cryptocurrency exchanges into five groups. All exchanges share the common element of facilitating the participation of users in the cryptocurrency market. However, there are several differences between them that allow them to be grouped into different sections.
The first group is the traditional exchanges. All of them are highly regulated and apply know-your-customer (KYC) policies. Therefore, the user must disclose his or her identity to participate in these platforms. Among the best known are Binance, Coinbase, Bitfinex and Kraken.
These exchanges charge a fee for their services; they may also include charges for deposits or transfers, depending on the medium used to carry out these operations. The exchanges generally act as a traditional bank would: they ensure that transactions between customers flow smoothly and provide custody of digital assets.
The second group of exchanges is that of brokers. These spaces allow users to exchange their cryptocurrencies for others. The purpose of these platforms is to offer an exchange that enables the user to access a specific cryptocurrency. Among the most widely used are Bit2Me, Changelly and Shapeshift.
The third group are the so-called “OTC platforms” (over-the-counter). Their operation is similar to that of traditional exchanges. They offer p2p (peer-to-peer) exchanges between sellers and buyers.
The fourth group is the cryptocurrency funds. These are cryptocurrency investment management spaces. They are usually managed by professional traders. They enable users to buy access to cryptocurrencies through the fund. In these cases, users can buy and sell cryptocurrencies without storing them, as if it were a negotiation of a part of the investment portfolio of that fund.
Finally, there are the decentralized exchanges or DEX. These platforms are notable for their high levels of privacy. KYC is enforced in very few of them. Their operation is similar to that of traditional exchanges, but the platform is self-managed through programming. Therefore, there are no intermediaries in the process. Decentralized exchanges include Curve, Balancer, Uniswap and AAVE.
How to create an exchange
Creating an exchange is a complicated and costly process. It can take months or even years, even with a good development team, to create the platform’s software and get it fully operational. Afterwards, it will be necessary to integrate payment platforms, for example, with those of traditional banks and other exchanges. This platform must also have a user interface and allow the creation of digital wallets for its users.
Altogether, this makes the cost of creation high. A minimum initial capital of 20,000 Tether (USDT) is required, but to sustain the liquidity of the project it is advisable to have at least 2,000,000 USDT. In addition to this, a team of IT developers and a legal team must be hired to ensure that the new exchange complies with the relevant regulations and laws. Not to mention a heavy investment in marketing to promote the business.
Considering all these costs, many are wary of the possible profitability of a new exchange in such a competitive scenario.
Fortunately, there are other alternatives, from companies that allow clients with little capital to own their own exchanges. These companies have specialized tools that facilitate the creation of cold virtual wallets (where the client owns the key to access their crypto assets) and hot wallets (which are stored inside the exchange).
These companies also provide a modern asset settlement system, as well as the development of the web platform and the mobile applications associated with that website.