Blockchain-based bourse SprinkleXchange is aiming to list its first company in the next month, according to a Bloomberg report.
The trading platform is developed on Ethereum’s blockchain platform and uses its smart contracts feature for trade settlements. As revealed by Alexander Wallin, the chief executive of Sprinkle Group SA, the exchange is aiming to bring around 35 companies in the next 12 months and expecting to list 1,000 companies over the next 3 to 4 years.
“We have the luxury of being first with this, but we’re aware that it will become a crowded market,” Wallin told the publication. “It’s like moving from VHS to streaming; Netflix did it nicely and was first, but now there are lots of streaming sites.”
Awaiting license for full service
Registered in Bahrain, the exchange has received approval from the country’s central bank to operate under a regulatory sandbox. It is also expecting to obtain a regular operating license from the central bank by October.
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Along with stocks of the companies, the blockchain-based exchange will also offer trading options with digital currencies and, similar to other crypto exchanges, will operate around the clock for both stocks and digital assets. The CEO also revealed that the platform is only approaching small-cap companies with a market cap between $20 million to $200 million across all sectors.
Moreover, the exchange is also planning to list exchange-traded funds for its clients.
Reducing operating cost
According to Wallin, the operating cost of a blockchain-based stock exchange is significantly less than a traditional exchange as Ethereum takes care of crucial operations including central clearing systems, repositories, stock certificates, dividends, and voting, which otherwise need a costly third-party service provider. The exchange will follow a Dutch auction method to set the trading prices.
“The cost is about the same as when you list on a Swedish stock exchange, but you get global access and we can show that you also get better liquidity,” Wallin added.