Regardless of some of the projected failings in the future, the cryptocurrency business continues to flourish and mature. There are limitless opportunities already available on the blockchain. Legal opinion (the most common one, at this time) is that establishing a cryptocurrency exchange seems like the most lucrative crypto-themed business.
Depending on the structure of the exchange, it enables the users to either trade different cryptos or exchange them for traditional assets (fiat). To ensure the fully lawful function of such exchange, proper certification is mandatory.
FAQ >>> Blockchain | Legal Opinion on Types of Crypto Exchanges
Traditionally, crypto exchanges are split into the following categories:
#1. Classical crypto exchanges. It’s the type that focuses on crypto-to-crypto exchange. Users can only trade cryptos, including major crypto-currencies such as BTC, Ethereum, and lesser-known altcoins.
#2. Fiat crypto exchanges. Secure, fast, and easy way to exchange traditional (fiat) currencies to crypto and vice versa.
The latter allows for more flexibility, but some experts claim that the former option is going to become the more in-demand option in the nearest future. Time will tell.
Most Popular Jurisdictions to Obtain a Blockchain Software License
The simplest way to catalog the most commonly picked jurisdictions, countries, states, and territories is to divide them based on the continent. We are, of course, not saying that some options are objectively more preferable than the others, we are just saying that some options are better suited for specific projects.
Registration of a Crypto Exchange in Asia
The most popular picks include:
All of the countries mentioned above have proven and reputable legal frameworks as well as quickly developing economies. The best license for blockchain option out of the bunch seems to be Malaysia.
There exists a plethora of reasons that make this country so tempting, including the fact it offers a lighter compliance framework when compared to most others. You can’t overlook the fact that the competition is rather thin (at the time of writing, anyway) – there are only three registered exchanges operating out of the country.
Best European Options for a Cryptocurrency Exchange
Almost all the countries in the EU would make a solid choice, but we would like to highlight the following:
Unlike the section above, there’s no clear leader. Each option comes with its own set of perks. For example, Estonia can offer a beautiful 0% corporate income tax to those wondering how to obtain blockchain license in Europe. For what it’s worth, Portugal has already topped countless lists of the “most crypto-friendly countries of 201X/202X.” The Crna Gora state is no slouch either: it can easily sway future crypto businessmen with its extra-flexible economic system that can potentially be fitting for every kind of project.
North American Crypto Exchange Registration Options
As far as North America goes, there are two popular options:
- New York
The reader can already tell that we refuse to get into the intricacies of the process itself: after all, writing about HOW to obtain a blockchain license is a herculean task. The step-by-step guide is a colossal article in and of itself, so we are going to be focusing on the surface-level information only, including types of crypto exchanges and most popular options within each continent.
This little side note here is important because we will NOT discuss New York and its BitLicense. As mentioned above, all of this information deserves to be examined in an entirely separate article, not as a footnote. Let’s just say this: even though it’s exceedingly hard to obtain the license, it WILL inevitably become your gateway to one of the most prolific and well-respected crypto markets.
Canada, on the other hand, is nowhere near as strict, but it’s nowhere near as prestigious as well. The jury is still out on which of those two should be elected by smaller-budget projects.
Blockchain Software License – Trusted Offshore Options
Top options for offshore include:
- British Virgin Islands
- Saint Vincent and Grenadines
- Cayman Islands
Depending on the scope and budget of the crypto exchange project, investors are free to pick and choose jurisdictions to optimize taxation and diversify the risks. In our personal opinion, the British Virgin Islands is the one that’s going to be suitable for the highest possible number of projects.
Here are the key things that make the BVI the preferable option (or the best-license-for-blockchain option):
- Tax free. If you are able to “prove” that all the operations are carried out outside of the BVI soil, then your business is not subject to income tax.
- No additional fees on the licensing process.
- Yearly maintenance is on the lower side, as opposed to other jurisdictions in the same area.
- Crypto-friendly environment. You can tell that the government is interested in facilitating the growth of such an innovative economic sector.
- No minimum capital requirements.
Written by Spencer Calvert