California-based Baton Systems has secured $12 million in its Series A funding round to develop a blockchain-based payments system.

The round was led by Trinity Ventures and participated by big names including Alsop Louie and Commerce Ventures.

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Commenting on the funding, Arjun Jayaram, chief executive of Baton Systems, said: “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.”

On-boarding big players

Founded in 2016, the California-headquartered company aims to make the settlement process more efficient with a peer-to-peer payment infrastructure. Per the company, it has partnered with three of the top ten global banks, along with multiple exchanges and clearinghouses to deploy its technology.

The company also partnered with Bank of England for testing of blockchain technology in real-time gross settlement (RTGS).

“Speed to market is critical in an industry that is crying out for modernization while at the same time facing a daunting global regulatory environment,” Jayaram added.

For a smooth transition to the decade-old technology in the banking system, Baton only integrates with financial institutions’ current collateral and cash systems. It also provides customizable software workflow engine to coordinate among multiple systems and institutions to move real assets in real accounts, along with instant reconciliation and reporting for all parties.

The company also detailed that its network already handles $12 billion worth payments each day across its network of market participants and clearinghouse counterparties, enabling more efficient management of the foreign exchange settlements and margining process.

“Bank-to-bank settlement today is slow and manual, trapping billions of dollars that could instead be used to grow businesses. Baton is completely transforming the global bank payments infrastructure, leveraging the best of blockchain’s potential while mitigating its key concerns,” Schwark Satyavolu, general partner at Trinity Ventures and a member of Baton’s board of directors, added.

Meanwhile, Ripple also partnered with PNC Bank, one of the United States’ top ten lenders, to join its RippleNet. It became the first US-based bank to join the group of over 200 global banks.