Baton has raised $12 million in a Series A funding round led by Trinity Ventures. According to Ledger Insight, the company is building DLT based software for banks that can be immediately integrated on their networks, September 2, 2019. This product would mean that banks no longer have to think of a complete overhaul of their technology.
Distributed Technology for Today
Most decentralized technology and cryptocurrencies offer the promise of a better tomorrow, but Baton is launching a product for banks that helps them scale for today.
The platform integrates with the technology stack by running along with the bank’s current ledger of deposits and loan collateral. This leaves the existing framework as it is while adding new functionality with customized software. The Baton engine can coordinate between a number of institutions, allowing for cheap, hasty transactions between banks.
Baton claims to have already been integrated widely across the financial services sector with over $12 billion worth of payments being routed through their product.
The Bank of England used Baton’s help to try and run the real-time gross settlement (RTGS) fund transfer mechanism on a blockchain. CEO Arjun Jayaram believes that this shows the power of blockchain without cryptocurrency or tokens.
As a company that deals with settlement and fund clearance, a paint point they can help tackle is that derivative contract settlements. The International Swaps and Derivatives Association (ISDA) launched a technological standard to help improve interoperability amongst institutions. A hackathon hosted by Barclays sought to find the best implementation of this, and Baton won the competition.
Institutions Need Immutability
Some people believe that a blockchain should only be public and that permissioned ledgers don’t make sense. But in a world with so much corporate activity, blockchains can bring a new paradigm of transparency and risk management.
Hypothetically, if a blockchain set up between J.P. Morgan and Goldman Sachs, it would be a permissioned ledger as it would not be accessible to the general public. But transactions and any other information recorded on it cannot be changed by either organization, because the other party has a digital copy of the ledger with information that updates in real-time.
Organizations need immutability to protect themselves from other companies that may attempt to profit by altering their data.