Payments technology startup Baton Systems has announced that Citi and CME Clearing have implemented its real-time distributed ledger platform.
The solution enables a bank to view the collateral in its ledgers in real time, send cash or securities with one click to a clearing house, and receive an immediate acknowledgment, regardless of the current technologies they are deploying.
“This technology allows us to eliminate manual touch points, reduce email traffic, and avoid logging into multiple portals,” said Stephen Marx, Head of Futures, Clearing, and Collateral Operations at Citi. “The capabilities in the funding and collateral space create efficiency and improve productivity for our clients.”
Calling it “blockchain-inspired” software, Baton Systems said that the solution could materially reduce the cost of back-office operations and speed up margin funding times. If trade times can be reduced from days to seconds, the solution could potentially free up billions of dollars which banks have to currently set aside as they wait for collateral to be settled.
“This innovative real-time payments platform is immediately scalable across any financial institution, exchange or clearing house to deliver sizeable operational and cost efficiencies,” said Arjun Jayaram, CEO of Baton Systems. “Its beauty is its simplicity, leveraging the most useful elements of blockchain, while introducing interoperability and extensibility to easily fit with existing technology 'rails' and business processes.
Baton Systems said that it is looking into other uses for the API-driven platform, including allowing clients access to distributed ledgers to shorten the cycle for collateral substitutions.
