XRP: Ripple competitor Baton Systems could soon take the lead

Rick Steves

“3 seconds is a database update and does not move anything. Baton Systems actually settles with no risk. The 3 minutes accounts for the bank ledgers updating and the money actually moving (settling).”

For a long time, Ripple has garnered much attention within the crypto space for its FX settlement capabilities using its blockchain technology and network.

Enthusiasm grew widely because XRP, the first and most popular digital asset to live on the XRP ledger, trades on the crypto exchanges and many investors have exposure to it, skin in the game.

Baton’s Core-FX solution powers FX settlements for major banks

But Ripple, with solutions powered by XRP, is not the only player in the FX settlement town using blockchain technology. Among the firm’s leading competitors is Baton Systems, which was founded as Ubixi in 2016.

The latest news is that Baton Systems’ Core-FX solution powered the world’s first interbank Payment vs Payment (PvP) settlement outside of CLS.

The Core-FX solution was built on Baton’s proprietary distributed ledger technology (DLT) and is governed by the Baton Rulebook. No associated digital asset can be found on the cryptocurrency markets, though.

The solution enables banks to tackle risk in FX settlements generally and in emerging market currencies that sit outside the framework provided by the CLS system.

Baton’s innovative PvP solution empowers market participants to take direct control of their settlement cycles, settle multiple times a day, and streamline workflows, resulting in significant improvements to their liquidity, funding, risk and credit management.

Arjun Jayaram, CEO and Founder of Baton Systems, said: “This development is hugely significant for the entire FX market, as it offers firms the opportunity to really address settlement risk – arguably the most critical control issue impacting post-trade today.

“Today’s announcement demonstrates the tremendous potential this technology presents to FX market participants globally to improve their risk management, intraday liquidity controls and funding profiles. Using proven technology that is readily available today, banks can now take control and completely revolutionise their entire post-trade process from trade-capture through to settlement.”

As part of the implementation both banks have agreed to the Baton Rulebook, a framework designed to provide legal certainty around settlement finality. Baton is engaging with other leading FX trading businesses, as well as regulators globally, to expand market access to fast and riskless PvP settlement protection to a wider universe of participants.

Baton’s 3 min vs Ripple’s 3 sec

The abovementioned FX settlement was between HSBC and Wells Fargo. The major banks intend to start using the Core-FX platform to settle FX trades bilaterally on demand in less than three minutes, on a PvP basis with legal settlement finality.

Ripple has made a name for itself for building a solution that takes only 3 seconds.

FinanceFeeds spoke to Baton CEO and founder Arjun Jayaram, who explained the difference between Ripple’s 3 seconds and Baton’s 3 minutes.

“To clarify, 3 seconds is a database update and does not move anything. Baton Systems actually settles with no risk. The 3 minutes accounts for the bank ledgers updating and the money actually moving (settling). Doing that with finality and not introducing crypto assets is what makes the announcement today an industry trendsetter.”

XRP.org claims a finality time of 3 to 5 seconds, here.

Baton Systems has been able to emerge from the inside and has hired many insiders, including ex-CFTC Chair Giancarlo aka “Crypto Dad”, ex-FIA Chair Jerome Kemp, and Basel III reform Chairman Bill Coen.

The firm has already connected to ICE Clear after having integrated with LCH for automation of collateral workflow and powering JP Morgan’s collateral management.

Besides being developed by institutional players for institutional players, Baton Systems has made its way far from the crypto headlines.

One of the reasons why Ripple looks for media and retail investors’ attention is because the firm funds (or funded, amid the SEC lawsuit) its operation by selling XRP in the market.

Baton has a different way to go about it and is completely focused on working closely with the industry and it’s been extremely successful at that while raising 15 times less funds ($19.1 million vs $293.8 million).

It is possible that the banking industry might prefer using Baton’s blockchain solutions than working with Ripple, a firm at the heart of the cryptocurrency industry, because it could implicitly further legitimize cryptos, stablecoins, and CBDCs, which are seen by bankers as a threat.

Read this next

Retail FX

ThinkMarkets expands CFDs lineup to over 4000 ETFs and shares

ThinkMarkets has expanded its service offering by incorporating 2500 new CFDs on shares and ETFs on its ThinkTrader platform.

Retail FX

France regulator warns investors of Omega Pro, Businessempire.fr

France’s financial markets regulator alerted investors that scams related to Omega Pro Ltd are beginning to circulate, with the blacklisted firm capitalizing on the situation to run a range of “unrealistic” offers.

Digital Assets

Web3 platform Grand Time paid $2 million in token earnings to date

Community-driven Web3 platform Grand Time said its offering – which includes a multifaceted platforms and its native token – has been gaining significant traction highlighted by impressive operational metrics.

Institutional FX

FX volumes at MOEX halved in April as ruble gains gorund

Currency trading at Moscow Exchange (MOEX) halted its upward route in April as monthly volumes nearly halved from a month earlier.

Digital Assets

FTX US adds stock trading, fractional shares to crypto platform

FTX US, the American subsidiary of crypto exchange FTX has kicked off stock trading feature to its customers in an effort to compete with popular platforms such as Robinhood and eToro.

Industry News

UK FCA empowered to remove brokers’ permissions in 28 days

Businesses with permissions they don’t need or use, risk misleading consumers. These new powers will enable us to take quicker action to cancel permissions that are not used or needed.

Industry News

CFTC charges $44m Ponzi scheme but millions may have fled to foreign crypto exchange

The CFTC alleged that defendants transferred millions of dollars to an off-shore entity that, in turn, may have transferred funds to a foreign cryptocurrency exchange. None of these funds were returned to the pool.

Technology

Saxo Bank deploys Adenza to address Basel and EBA requirements

The integration of ControllerView will enhance Basel-driven capital calculations and reporting at Saxo Bank in support of the bank’s multijurisdictional capital and liquidity reporting requirements throughout Denmark, Switzerland and UK, with plans to expand into the Netherlands.

Executive Moves

ComplySci appoints CTO, CPO, and CLO to further regtech’s product expansion

ComplySci offers compliance software used by more than 1400 global institutions to identify risk and address regulatory compliance challenges.

<