Cryptocurrency exchanges like OKEx, Binance, Huobi, Kraken, and Bitmex describe the main obstacles they are facing in lobbying for worldwide presence.

Cryptocurrency exchanges have a significant calling in fueling acceptance across the globe, but even major operations are faced with substantial challenges in attempting to widen the scope of their services. The discovery of Bitcoin and the following development and launch of various other cryptos have impacted the outlook at transacting worldwide. Dependence on conventional banking systems is no longer the lone choice offered to people.

Blockchain networks and cryptos can be bypassing traditional financial systems and enable people to trade directly without needing to go through a centralized institution. In an ideal, crypto-safe world, traders would be transacting in a P2P way, but there are some limits to the uninitiated entrance. As a result, lots of those new to cryptos use exchanges as their entry points into the ecosystem as they exchange their fiat currency into crypto of choice. By now, clients are spoiled by choices with the lone amount of crypto-exchanges operating worldwide.

However, a few of such exchanges are trying to jump ahead of the rest and establish themselves as worldwide enterprises. But what are the main challenges, and how are they going to build these empires?

An act of juggling

It’s obvious that constructing a successful crypto-exchange needs a substantial chunk of time and resources as well as the possibility to overcome obstacles at all times.

This is pooled when operating over countries and continents, seeing how lots of nations have their own rules and laws on the usage of digital coins, the transfer, and the flow of conventional currencies. Jay Hao, chief executive officer of OKEx, thinks that there are a number of things that render our surroundings a complicated and challenging business atmosphere, which means that lots of CEOs in this business don’t get lots of rest. According to him, expanding a worldwide crypto-exchange is one of the most taxing sectors to be involved in. There’re lots of obstacles – from attracting and keeping the correct talent to consolidating and widening the list of clients, making sure there is liquidity, marketplace depth, and enticing offerings of products. One must also be sure that the exchange is safe and rich, that it can take unanticipated high levels of money with almost no downtime – all of this while being in line with regulations.

Changpeng Zhao, the chief executive officer of Binance known as CZ, highlighted the significance of providing a global mentality while sustaining a realistic business model. To do this, CZ suggests that exchanges need to consider the unique needs of clients in various areas. There are various methods for different marketplaces. In order for this worldwide enterprise to work, one must be sure that a good infrastructure for clients is offered to better their experience. For a round-the-clock atmosphere of digital coins, this is significant. Moreover, they have employees from various sectors that can offer custom assets and services to local marketplaces, and they make sure the marketing approach is in line with the local mentality, languages, customs…

Huobi’s head of global business and markets, Ciara Sun, expressed a similar thought, discussing a couple of main factors that the exchange has concentrated on since its inception: localization and regulatory enforcement. Holding a clear picture of the needs of the user is a thing that drives exchanges and the support they get in various areas. Because localization is not only providing an exchange in the needed language. No, a user in one marketplace will have specific wishes, needs, and habits. Thus exchanges need to be adaptable for all targets and give locals a very custom experience.

As Sun states, knowing why consumers in particular nations or areas are trying to utilize cryptos offers insight into what kind of products would succeed in various places. They spend a lot of time studying the details of a new marketplace before entering it.

A spokesperson for BitMEX commented on the hardest parts of operating across continents. Customer service was invaluable and needed lots of resources. Since they operate around the clock and serve clients from all corners of the globe, their chance of providing good service, no matter the time zone, is crucial. The BitMEX client care sector is one of the biggest in the company and provides care in lots of languages.

A Kraken spokesperson stated that regulatory differences in nations are one of the hardest hurdles when expanding into anew area. Basic regulations are significant since they assist in determining which assets an exchange can provide and who can be targeted. If this is performed correctly, it may also give way for competitors. Moreover, education is something Kraken focuses on since spreading awareness will help them and the sector as a whole.

Finding their way in the world

Transforming into a worldwide crypto-exchange is no easy task. Seeing how there is not a general regulatory entity for the sector. Taking into account that cryptos have been around for over 10 years, the regulation is in the hands of specific nations and their laws.

Seeking that lots of banks have to oblige with stringent controls from regulators, cryptos will surely need to comply with a similar level of rules. Lots of them must follow the Know Your Customer and Anti/Money Laundering rules for them to be able to exist legally.

As explained by OKEx Hao, the organization takes the lead from the Financial Action Task Force (FATF) rules when it comes to branching out to new areas. However, Hao argues that a worldwide body regulating the cryptos is unlikely, requiring the exchange to have a big legal team on board to ensure enforcement in every area where the exchange has operations. Since every jurisdiction has its set of rules and guidelines, and they are also shifting all the time as the industry changes, establishing such a worldwide authority would be hard.

Huobi’s Sun further highlighted how significant it was to comply with regulations and get the licenses needed. This will take a lot of time and effort, but it’s a useful thing for the firms.

The big problems everyone is talking about are the vastly different rules around the globe and the changing legal standings. Sun said that this was hard since every nation has some unique rules, and there is no global agreement on digital asset regulation. Thus, all marketplaces end up being complex and unique.

Binance’s CZ told that the absence of a central body that regulates all marketplaces is attributable to the notion that the digital coin sector is so young, which means that exchanges have to work along with regulators in all countries. For instance, the States have well-performed compliance procedures, where a cryptocurrency exchange has to get lots of licenses from varying states to be able to serve residents there. For Binance, they continue to cooperate with local policymakers and agencies.

Kraken’s spokesperson emphasized the need for strict compliance with the numerous regulatory bodies and watchdogs and the laws that they set out to work on various continents. These concerns go further than merely adhering to the KYC, AML, and FATF regulations; they also count in implementing restrictions by the US, which ensures that Kraken is banned from operating in some nations. The spokesperson added they’re also increasingly aware of the need to ensure compliance with worldwide data protection regulations, such as the European General Data Protection Regulation.

BitMEX spokesperson said that the main pusher of success would be the willingness of the exchange to adjust to regulatory conditions as it carries on to grow. In addition, the exchange sees that regulators around the globe are growing their interest in crypto, adding that those efforts are welcomed since they assist in establishing better foundations for the crypto-marketplaces that’ll underline the advancements of the popular asset class. They think that those who will prosper will be those who are quick to adapt to the standards and maintain them.

Plugging into legacy networks

The crypto-expansion has been gradual and steady for the previous 10 years, but the sector has already made itself aware of the conventional financial environment. Still, the “latest” also needs to be plugged in and compliant with the “old” one. In order to establish usability for newcomers, cryptocurrency exchanges need to build fiat gateways to their networks, which involve partnership-building, trust, and familiarity with the conventional financial system.

When it comes to the relationship between conventional and crypto-banking, Kraken believes that their link is significant. Still, there is no effort from some banks concerning this issue, and the difficulty of operating with such firms remains a task since it takes time to establish common ground with them. So even though there are lots of future-oriented bank institutions, there are also those who are afraid of cryptocurrency-related risk. This is a pity since they are leaving their clients with less chances to gain from these new happenings.

Other problems stem from nations that want to utilize the laws already in place to dictate the usage of cryptos. This also helps and hinders the crypto expansion since not all nations adopted a new legal framework for this sector. All of this, starting from the very definition of digital coins, can slow down the process.

For Binance’s CZ, legislation is not inherently in contrast to cryptos. CZ thinks that regulatory support will fuel innovation and assist in forming cryptocurrency and distributed leverage space, much like the evolution of fx trading. Seeing the similarity between the FX and crypto sectors, like the fact they are fueled by hi-tech, one can assume that cryptos will go a similar route as forex legalities. This may entice policymakers to be quicker in adopting legal frameworks.

Huobi’s Sun claims that there is a shifting mindset when it comes to cryptos from regulators and the conventional financial system as they increasingly gain a comprehension of digital coin and distributed leverage systems: “t’s natural that fx regulation and bank structures have not yet completely caught, and regulation at the moment carries on evolving as regulators adjust to evolving finance.

This makes lots more conventional entities accept new tech and start supporting cryptos and exchanges. They are also noticing less opposition from legacy financial entities. Huobi connected to some financial entities to ensure that fiat gateways are offered to local clients in some marketplaces, so even though there are lots to be done, legacy banking is advancing better than expected.

Forever-changing world

As different crypto-exchange representatives pointed out, the worldwide crypto-world is a complicated space. Creating and putting out there a crypto-exchange is a tech challenge. Taking the exchange and offering service in various areas will further add lots of complications that need a substantial number of tools and energy.

Seeing this, exchanges that are expanding around the world are at the head of the sector and are lobbying for the acceptance of digital coins everywhere.