It is not necessary to transfer a domain name under the registry of a web hosting provider to host the domain name on the server. You can do it if you wish to keep your domain name and web hosting package at the same place. It gets easier for you to manage your domain name and your web hosting package if you have them at the same place ( The web hosting provider ) and this is generally preferred. You will have to pay some amount to transfer a domain name from one registrar to the other. If you do not want to do this then you can simply update your nameservers and keep the domain name registered with a different domain name registrar.
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