The cryptocurrency industry is booming – Bitcoin, Ethereum, XRP, and other coins are gaining support around the world. More companies are eager to implement a new type of payments, while cryptos worth of billions of US dollars are being traded on a daily basis. Many people are joining the trend, wanting to make a sound investment, and the number of exchange services on crypto market is growing that fast that it’s hard to choose one without using overviews from experts.
However, there’s also an opportunity to create your own cryptocurrency exchange, and Africa is likely to become a suitable arena for this. Given the fact that many African countries are witnessing inflation and people are striving to hedge against risks, cryptocurrency is certainly the way out.
So, why bother frantically trying to monitor crypto prices when you can make a profit from other people investing? We’ll provide a brief guide on how to start your own crypto exchange business in 10 simple steps.
1. Seek legal aid
No one can simply create a company without prior legal planning. You should have a firm grasp of any regulations and laws relating to starting this type of business within your country. Although most African leaders adopt a wait-and-see policy when it comes to regulating cryptocurrency, the industry-specific laws may still vary greatly by location, therefore, it is crucial to understand what you are allowed to do.
2. Obtain initial funding
It is highly unlikely to start a crypto exchange without any funding. You will need financial backing and liquidity. The initial amount should be no less than $100,000. This is essential for getting your exchange off the ground. You will need it to pay for website development and all the tools your service will use, also, for legal counsel and marketing. Ensure you have drafted a financial plan that includes as many details as possible.
3. Find a suitable technology
Unless you intend to build and code a crypto exchange from scratch, you will need an underlying platform to run. There are numerous companies, such as Modulus and Draglet that provide this type of platforms. You will have to pay a license fee or some form of subscription to use it.
Consider your needs and explore different software providers before you make a choice. You can also consult technology experts or apply for startup-related programs like those held by the African Technology Foundation.
4. Incorporate an online payment processor
Your platform will obviously have to provide a means for making deposits and withdrawals. A high quality and secure payment processor is an absolute must. Some platforms have a built-in system, but it may have limited functionality. Choosing a processor, look at its security, transaction fees, and compliance with your country’s standards.
5. Take care about security
Customers want to be sure that their card details and personal information are safe and that they won't fall victims of malicious attacks or phishing schemes on your website. To that end, you must find a security provider or ensure that your exchange is adopting the latest practices in terms of cyber protection.
6. Research the market
To start a crypto exchange, you must have a strong understanding of the industry. Coindirect, BitPesa, Cryptochange, and other popular African exchanges have already built a strong community behind and earned trust of numerous users. In order to stay ahead, you need to analyze the situation and make timely decisions. Research popular cryptocurrencies, look at lesser-known altcoins that could potentially be useful. Also, take time to review other exchanges and see what features they have – try to find gaps in their functionality and fill them with your solutions.
7. Test your exchange
Do not launch your exchange without testing! Imagine all the bugs you could face. Put it through a beta testing period first. See how it works and what problems you encounter – ensure that all issues have been addressed before the launch.
8. Promote your exchange
Without promotion and marketing, how do you expect people to find your service? You can use social media and email campaigns. Moreover, you could consider reaching out to popular cryptocurrency news outlets like Coindesk – they often post articles about new technologies. Having a fantastic reach, they could really help boost interest.
9. Hire an outstanding customer service team
A crypto exchange must have a reliable customer support. What happens if your users experience account issues and no one can help them? You must employ a team of trained professionals who understand your platform and can deal with any problem your customer may face. Consider incorporating a ticket system or a live chat. What’s more, you should decide on whether your exchange will serve African users only, or will be operating worldwide. Under the latter scenario, it’s better to have several support teams assigned to different regions – let’s say, Europe, the USA, and Africa.
10. Monitor progress and make adjustments when needed
The worst thing you can do when your exchange has been launched is to simply leave it as it is. You must analyze its performance, collect customers’ feedback, and think about how your exchange could be improved. Continual advancement is a must to keep your exchange useful.
To sum up
As you can see, launching an exchange is a complex and demanding process. If you have dedication and determination, pay attention to every detail and stick to a step-by-step plan. Use famous exchanges’ success stories for inspiration – for instance, Binance has quickly become the largest crypto platform not least due to its utility coin. It’s important to have a practical feature that is attractive for customers and makes your service stand out from the crowd.