What Is a Digital Currency Exchanger (DCE)?

A digital currency exchanger (DCE) is a person or business that acts as an online market maker and excha🐠nges legal tende🍎r and other electronic currencies for electronic currencies, and vice versa, for a commission.

Understanding Digital Currency Exc🌊hangers (DCEs)

Most 澳洲幸运5官方开奖结果体彩网:exchanges happen online rather than at physical locations. 

A DCE charges a commission for this type of transaction. This commission can be i🍒n the form of a set fee or percentage, taking the bid/ask spread. Exchangers may also accept payment by credit card, cryptocurrency, wire transfers, money orders, and other payment methods. DCEs are also known as cryptocurrency (crypto) exchanges.

​​​​​​​Digital currency exchangers might send funds directly to an investor's digital wallet or convert currencies to prepaid cards, which can be used to withdraw cash from 澳洲幸运5官方开奖结果体彩网:automated teller machines (ATM).

Digital currencies operate as self-governed currencies, unlike 澳洲幸运5官方开奖结果体彩网:fiat money, which is legally sanctioned by a government.

For example, digital gold currency (DGC) is an electronic currency that has its value based upon the gold bullion price. DCG offers the user the same he꧟dge against inflation as physical ownership of gold but is purported to be more secure and convenient than holding the physical commodity.

Investors sho﷽uld be well aware of the risks associated with digital currency exchangers. Global regulation of electronic currency varies, and its advent is still relatively young. 

As Bitcoin Magazine opined, "Things have already begun to heat up as countries around the world grapple with cryptocurrencies and try to determine how they are going to treat them. Some are welcoming; others are cautious. And some countries are downright antagonistic."

Recent Developments in Digital C𝓡urrency Exchange

Digital currency exchangers are in a time of transition with the rise of cryptocurrencies like 澳洲幸运5官方开奖结果体彩网:Bitcoin, Litecoin, Ethereum, and others.

There are many different digital exchanges, some more reliable than others. Most of the exchanges are 澳洲幸运5官方开奖结果体彩网:privately held businesses, which makes access to financial information and company management troublesome. Also, due to the newness of cꦯryptocurrency,🅠 many exchanges have only been in business for a few years.

DCEs vary on the fees or commissio🅺ns that they charge usಞers, as well as the currencies or cryptocurrency they accept. Trades, as well as holding an open account, may incur a fee from these providers. Users are advised to research available digital currency exchanges and compare the posted fees and commissions before opening an account.

Regulators in the U.S., U.K., Europe, Asia, and elsewhere seem to be finally grappling with the fact that companies operating in this fast-evolving market need to be regulated more definitively. According to Valdis Dombrovskis, vice president of the European Commission, and reported by Reuters, "There are clear risks for investors and consumers associated to price volatility, including the risk of complete loss of investment, operational and security failures, market manipulation, and liability gaps."

Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein.