Before the local exchange is opened up to onboard the public, it is important to consider the rules under which the exchange would operate. Upon careful consideration of local exchange requirements, TotalCrypto advises the following in regards to exchange operation rules:
- A disincentive should be in force to prevent everyone from swapping all their cryptocurrency to local currency and instead incentivize locals to spend crypto in the community. The local onboarding center can also serve as a cryptocurrency exchange. Rules of exchange:
- An unlimited amount of local currency can be used to buy cryptocurrency at the true global market rate.
- Crypto can be converted into local currency. However, only 5% of the value of the gifted cryptocurrency can be exchanged per day e.g. if $10 was gifted to each person, then 50 cents could be exchanged per day. The second disincentive is that people will only receive 90% of the Coinmarketcap valuation of the coin in the physical exchange. The other 10% will be recouped as an exchange fee.
As the exchange would have to hold inventory containing local currency, it is also recommended that security processes are in place to reduce risk for both the exchange and exchange employees. A detailed breakdown of proposed security procedures can be found in Appendix 2.