NEW YORK--(BUSINESS WIRE)--Citi and CME Clearing have implemented a real-time distributed ledger platform developed by Baton Systems, a payments technology provider. The solution allows 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.
The blockchain-inspired software could materially reduce the cost of back-office operations and speed up margin funding times. Currently, banks have to set aside capital as they wait for collateral to be settled; this platform could potentially free up billions of dollars in capital if trade times can be reduced from days to seconds.
“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.”
“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.”
“We are pleased to support technologies like these, which aim to provide capital efficiencies to customers,” said Sunil Cutinho, President of CME Clearing.
Baton Systems is exploring other uses for the API-driven platform, including allowing clients access to distributed ledgers to shorten the cycle for collateral substitutions.
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.
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About CME Group
As the world's leading and most diverse derivatives marketplace, CME Group (www.cmegroup.com) is where the world comes to manage risk. CME Group exchanges offer the widest range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural products and metals. Around the world, CME Group brings buyers and sellers together through its CME Globex® electronic trading platform. CME Group also operates one of the world's leading central counterparty clearing providers through CME Clearing, which offer clearing and settlement services across asset classes for exchange-traded and over-the-counter derivatives. CME Group's products and services ensure that businesses around the world can effectively manage risk and achieve growth.
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About Baton
Baton Systems delivers advanced technology solutions, bringing a new level of speed, efficiency and accuracy for financial institutions to clear, settle and manage payments. Founded in 2016 by industry veterans in technology, payments and capital markets, and backed by venture capital, Baton Systems works with numerous market participants – including major global banks, custodian banks and exchanges – to meet today’s demands for cost savings, regulatory requirements and better capital management. For more information, please visit https://www.batonsystems.com/
