Based in the capital of Sweden, Cinnober mainly provides tech solutions to traditional stock and commodity exchanges around the world. However, this year it has seen a few deals with startup. The most recent one is the Bitstamp exchange which announced this week that it will be the first in the space to use the vendors TRADExpress platform, alongside the likes of the London Metal Exchange.
“The most suitable ones are those who are looking to participate in the transformation that the industry is going through. We can serve retail-only focused currency exchanges, but the ideal customer for us is the one that is looking to cater more heavily to institutional investors.”
Especially looking at attracting more investors, exchanges should provide the same functionality as traditional stock and commodity exchanges do. As Wall says, adding in trade compression, netting and clearing mean that currencies can be traded like a typical financial asset.
With exchanges, they are typically operated on a pre-funded basis, only allowing users to trade as much as they have on their accounts, while traditional financial exchanges use cleared trades when customers maintain collateral deposited with a clearinghouse.
Wall continued to say:
“Right now the currency exchange market is very inefficient as there are no clearing technologies and clearing houses in place. We can help a currency exchange become a real exchange that has a clearing module, so trading is more efficient for institutional investors.”
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