California-based blockchain developer Baton Systems recently announced that it has raised $12 million in funding. Trinity Ventures led the Series A round, which included Alsop Louie and Commerce Ventures.
“This investment provides us with the strategic support and firepower to scale our bank-to-bank payment solution for the world’s leading financial institutions even faster and more effectively,” said Arjun Jayaram, CEO of Baton Systems.
Founded in 2016, Baton has been working on a distributed ledger technology (DLT) solution for the banking space that doesn’t require banks to overhaul existing systems. The company’s platform provides DLT-based solutions to address the immediate issues faced by its customers by interoperability with current business systems.
“The Baton platform integrates with financial institutions’ current collateral and cash systems, leaving their existing business processes, systems, and ledgers in place,” said the US company in an announcement. “Baton provides a customizable software workflow engine to coordinate among multiple systems and institutions, achieving fast, transparent, and efficient settlement by moving real assets in real accounts, along with instant reconciliation and reporting for all parties.”
The company said it already has a strong presence in the industry, with daily processing of over $12 billion in payments between market participants and clearinghouse counterparties.
Baton has deployed its platform for multiple global banks (three of top ten), exchanges and clearinghouses. Previously, it helped the Bank of England to test blockchain in real-time gross settlement (RTGS).
“We have developed a distributed ledger technology-based solution that significantly improves the speed and reduces the cost of payments without the need for cryptocurrencies and digital assets,” CEO Jayaram had said in an interview with Markets Media.
Given that Baton System is involved in post-trade and settlement, one major area of settlements for banks is derivatives. Last year derivatives industry body ISDA brought out a new technology standard, the Common Domain Model (CDM) for derivatives. The standard targets interoperability between firms.
Numerous companies participated in a Barclays-hosted hackathon to implement the standard, and Baton won the prize for the best overall solution in New York. Not long afterwards it announced that its post-trade settlement platform supported the standard.
