Exchanges
A crypto exchange is a platform where users can trade cryptocurrencies and digital tokens, including stablecoins, and operates in a similar way to a traditional stock exchange.
There are two distinct types of cryptocurrency exchanges:
Centralized exchange (CEX)
A centralized exchange functions much like traditional brokerages or stock markets. It is a platform owned and operated by a central authority, or company, that has complete control over user accounts and transactions. Users can easily create accounts, deposit funds, and trade stablecoins as well as other cryptocurrencies.
One key aspect of centralized exchanges is their adherence to regulatory requirements. Due to jurisdictional regulations, they often enforce Know Your Customer (KYC) procedures for user identity verification, and may require licensing to operate in certain regions.
Centralized exchanges are subject to the laws and regulations of the jurisdictions they operate in.
Decentralized exchange (DEX)
Unlike centralized exchanges, decentralized exchanges operate as autonomous decentralized applications running on public distributed ledger infrastructure. Decentralized exchanges facilitate peer-to-peer trading, allowing participants to exchange cryptocurrencies and digital tokens, without the need for a central authority.
One of the primary advantages of decentralized exchanges is their approach to security. Users maintain complete control over their assets and don't need to rely on a third party. By removing the reliance on a central authority for fund custody, decentralized exchanges significantly mitigate the risk of hacking or theft.
Which crypto exchanges support Ripple USD?
Note
Ripple USD is expected to become available to retail customers through various exchanges in the near future, subject to regulatory approval.