Cryptocurrency Exchange is primarily an enterprise that allows to deal and trade in Digital Currency. They also trade on other assets in exchange for cryptocurrencies. As digital money is transforming as a significant evolution of the global financial system, these platforms are becoming crucial establishments supporting distribution and thereby, adoption or cryptocurrencies. Providing cryptocurrency exchange solutions is an entrepreneurial trend, apart from market leaders foraying into the sector.
Exchanges can be both brick-and-mortar establishments or completely online organization. These companies store digital currency and exchange them with users. There are exchanges that operate as peer-to-peer trading platforms with no central authority. Such platforms are called Decentralized Exchange.
Digital currency and Cryptocurrency Exchange Platform are considered as a strictly private sector affair. Being away from the ambit of regulatory frameworks, no Government or public authority has leveraged this utility. However, several nations across the globe strongly support the cryptocurrency ecosystem considering them as a game changer in public welfare as public service delivery. Blockchain technology, the framework behind digital currency, is gaining a massive popularity in government as well as corporate verticals. Currency Exchanges, with unexplored possibilities of utilities, can become a significant public utility.
In the current landscape, most western countries with well-developed cybersecurity and monitoring system adopted cryptocurrencies as legal tenders. Including the US and the EU, digital currency is popular in Australia, Canada, and countries of South America. These countries are also open towards the new financial system, even if authorities have not invested directly on exchanges. However, central banks and government authorities for financial services and transactions in such countries have no options but to operate as exchanges to some extent, even if they are not investing massively in cryptocurrency exchange solutions. At least, central banks have been maintaining a unit specifically for cryptocurrencies, their exchange and monitoring transactions.
In contrast, in countries like China, Russia, and even India, authorities are still skeptical of Cryptocurrency. Interestingly, some of the major ICOs and currency exchanges operate from these nations. The challenges involved in cryptocurrency ecosystem made it tough for regulators to adopt it. Despite the roadblocks, cryptocurrencies are becoming relevant as a long-term utility. Its features of peer-to-peer connection, an absence of a third party mediator, and transparency is compelling public authorities to consider its possibilities strongly. Also, as stated by Bank for International Settlements, Distributed Ledger Technology, the mechanism behind Exchanges, and the digital currency ecosystem, has the potential to improve payment services and the financial market infrastructures.
Digital Currency is yet to gain mass adoption. Experts have an opinion that terms like blockchain and cryptocurrency are still mysterious for general users. Their understanding of the technology is comparable to the general understanding of computers in the 1980s when they debuted in the public market. Apparently, the scope of digital currency, exchanges, and cryptocurrency exchange development is strong. However, to gain prominence as public services, the framework needs to pass the regulatory bottlenecks.