Cryptocurrency or digital token exchanges are websites where one can purchase, sell or exchange digital tokens for other digital tokens or traditional fiat currency (e.g. USD or SGD).
There are 2 main types of cryptocurrency exchanges:
1. Fiat-to-Crypto
2. Crypto-to-Crypto
Fiat-to-Crypto Exchanges At A Glance
Crypto-only Exchanges At A Glance
Are the exchanges regulated by Singapore authorities?
The Payment Services Act came into force on 28 January 2020. Under the Payment Services Act, any entity that provides any type of payment service (including “digital payment token service”) needs a licence entitling the entity to carry on a business providing that type of payment service. There are three classes of licences — money-changers, standard payment institutions and major payment institutions. Licensees will by regulated under the Act for AML/CFT purposes.
Fees
When deciding which exchange to use for trades, fees are a key consideration. Here’s an explanation of the usual fees to look out for.
Deposit / Withdrawal Fee (paid to exchange platform)
Some platforms charge fees upon the deposit/withdrawal of funds/crypto from the platform.
Trading Fee / Spread (paid to exchange platform)
- A taker fee is charged if the trade order is matched immediately against an order already on the order book, removing liquidity.
- A maker fee is charged if the trade order is not matched immediately against an order already on the order book, adding liquidity.
- Profit-only fees — some exchanges don’t charge trading fees but impose a higher charge on any profits made from your trade.
- Spreads are the difference between the highest buy price and lowest sell price in the market. The spread that is enforced by the platform protects the platform from making a loss in selling cryptocurrency to you by selling under current market prices.
Network transaction fees (paid to miners)
Every time you send cryptocurrency from one wallet to another, you incur a network transaction fee. This is the fee that is paid to confirm your transaction on the blockchain.
The actual amount of fees vary depending on the cryptocurrency (Bitcoin, Ether, or Litecoin etc), the network capacity, and the market demand (i.e. how many transactions are looking to get confirmed at this point in time).
Here’s a snapshop of the fees charged by the fiat-to-crypto and crypto-only exchanges featured above. Crypto-only exchanges generally have more competitive trading fees than fiat-to-crypto exchanges.
Fiat-to-Crypto Exchanges (Fees)
Crypto-only Exchanges (Fees)
Promo Codes
- To sign up with Coinhako, use my referral link and promo code PENNYWISE to enjoy trading fees of 0.70% (usual rate = 1.00%).
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- To sign up with ecxx.com, feel free to use my referral link.
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- READ MORE:
- Read TABUL8TOR’s beginner’s guide to blockchain, cryptocurrencies, stablecoins, cryptoccurrency exchanges, cryptocurrency wallets.
- Check out TABUL8TOR’s comparison of cryptocurrency cards (TenX, MCO and Wirex) here!
- Visit TABUL8TOR for the interactive version of the above tables.
***Disclaimer: This post is for informational purposes only and does not constitute a recommendation to buy cryptocurrencies. Please do your own due diligence before taking any action.
