Banking News

JP Morgan partner Baton secures $4m funding from Illuminate Financial for blockchain

payments dollar

Yesterday, DLT firm Baton Systems announced a $4 million investment from Illuminate Financial.

The funds extend the $12 million Series A raised a few months ago and led by Trinity Ventures.

Founded in 2016, Baton is developing a DLT bank-to-bank infrastructure, without the need for overhauling the current systems. Its platform enables all stakeholders to clear and settle transactions in real-time while providing better transparency. Baton acts as a gateway between bank ledgers for real-time reconciliation without manual intervention. 

The DLT firm is also working with JP Morgan to provide a real-time view of collateral accounts and instant settlement for margin calls between multiple parties.

Meanwhile, Baton is the first blockchain (DLT) investment for venture capital firm Illuminate Financial,t. “Baton’s value proposition is not blockchain,” said Illuminate in a blog post. Illuminate says the benefit of Baton is its ability to connect to existing ledgers for a ‘synchronous workflow’.

Baton says its platform integrates with the bank’s current collateral and cash systems. It has a strong presence in post-trade and settlements and is already processing over $12 billion in payments for its clients. 

At present, three of the top ten global banks, exchanges and clearinghouses are using Baton’s platform. It was also involved in a Bank of England blockchain trial for real-time gross settlement (RTGS). 

Meanwhile, due to its presence in post-trade processes, the platform regularly deals with derivatives settlement. To this end, Baton natively supports ISDA’s Common Domain Model (CDM) for derivatives. The standard targets interoperability between firms.

Baton won the prize for the best overall solution at a 2018 Barclays hosted hackathon for implementing the CDM standard.