Legally based in Bahrain, SprinkleXchange has received approval to work under its central bank's so-called regulatory sandbox
The SprinkleXchange blockchain bourse is about to get its first public listing.
The platform that uses the Ethereum blockchain for settlement and clearing is preparing to list its first company in June, according to Alexander Wallin, chief executive officer of Sprinkle Group SA. It expects it can become home to as many as 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 said in a phone interview. “It’s like moving from VHS to streaming; Netflix did it nicely and was first, but now there are lots of streaming sites.”
The exchange targets companies with a market cap of $20 million to $200 million, and has received interest from all types of sectors, including real estate, forest and biotech firms, according to Wallin. It’s seeking companies that have a global customer base and an investor group with knowledge of the new technology.
Users will get to trade both listed companies and cryptocurrencies around the clock, according to the CEO, who says SprinkleXchange is also looking at listing exchange-traded funds.
A traditional stock exchange system “takes longer and costs more” than the Ethereum blockchain version, which automates central clearing systems, repositories, stock certificates, dividends and voting, Wallin said. Prices will be set through a Dutch auction method, while the company will charge a 1 percent listing fee.
“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,” he said.
Decentralised settlements and trading in both traditional and cryptocurrencies will lure both investors and issuers, Wallin said.
Joakim Bornold, a savings adviser at Soderberg & Partners, said SprinkleXchange is “an exciting idea.”
Removing clearing and settlement costs would streamline the market, but bigger companies are already on the same track, he said. “The technology is interesting but an exchange is so much more than an IT system. This can be a small niche player, but it’s not a new ‘Tesla’ we’re seeing.”
Legally based in Bahrain, SprinkleXchange has received approval to work under its central bank’s so-called regulatory sandbox. It expects to list about 35 companies over the next 12 months, Wallin said. The exchange has an initial cap of 10 listings, and can start adding more companies after October, once the central bank has given it all clear.