Benefits of Centralized Exchanges

Centralized exchanges work as trading platforms just like traditional brokerage or stock market. A centralized cryptocurrency exchange does not give private keys to the users for their exchange account’s wallets. This puts all of the user’s funds under the centralized exchange’s monitor, as transactions could only be made through the guidelines and rules approved by the central authority, and in this case the centralized exchange. Most of the white label crypto exchange Software around the globe is based on centralized exchanges owing to thee several benefits that they provide.

Why do businesses still go with centralized exchange, while crypto is decentralized and ideally the exchanges in which they trade should be decentralized.

Here are some exceptional benefits of the centralized cryptocurrency exchanges:

1. Trade volume: CCE records higher trade volume than their decentralized counterparts. 99% of crypto trade is still happening on CCE.
2. Liquidity: Due to its centralized nature, liquidity providers find CCE a safe option to trade their liquidity, and thus you get higher liquidity with CCE.
3. Fiat currency exchange: While decentralized exchanges are exclusively for cryptocurrency, centralized exchange allows users to trade fiat with crypto and vice versa.
4. Functionality: Some centralized exchanges offer varied functionalities, including margin trading, discounts for higher volume trading, institutional trading tools and more.
5. Popularity: There are more number of CCE around the globe compared to DEX. At this moment the highest number of user registrations happen over centralized platforms only.
6. Insurance: nowadays some CCEs are insured. It means that users are guaranteed to get their money back if there are some adversities over the exchange.

While, these days, centralized cryptocurrency exchanges provide more functionality to their users, one must remember that the burgeoning cryptocurrency industry was born out of the emergence of blockchain (distributed ledger) technology. The emergence of cryptocurrencies as a new form of money has had a massive impact on societies around the world. Owing to legal compliances of CCE, they are a favorite amongst investors and government authorities and thus they get a better edge over decentralized platforms. Today every cryptocurrency exchange development company helps you in complying to all the legal and governmental norms and helps you build your own exchange at any location in the world.