Indian tech giant, Tech Mahindra is launching a Stablecoin-as-a-Service blockchain solution for global banks and financial institutions. The proposed infrastructure which seeks to leverage the uniqueness of Stablecoins for digital transaction and cash settlements will be done in partnership with Quantoz, a Netherlands-based innovative Blockchain technology application incubator.
Stablecoins are a variant of digital assets whose prices are not subjected to extreme fluctuations as seen in Bitcoin (BTC), Ethereum (ETH), and other altcoins. Their values are usually pegged to a fiat currency most notably the United States Dollar.
In the past years, the use of stablecoins for transactions has soared, as they present a more durable alternative to cash in settlement operations.
According to the company, the use of “Stablecoins as a payment mechanism has significant potential to reduce transaction costs and processing time, while providing auditability and enhancing security.” In addition, the partnership and offers from both tech unicorns are a consideration of the ease with which Stablecoins can enable enhanced functionalities like IoT (Internet of Things) payments, micropayments, programmable payments, and cross spending across payment ecosystems.
OCC Stablecoin Stance Spunned the Innovation
According to the announcement, the idea of the Stablecoin-as-a-Service product was born out of the latest stance of the United States Office of the Comptroller of the Currency (OCC) to let Federally Chartered banks utilize stablecoins for payments and transactions.
“The recent OCC (office of the comptroller of currency) announcement promoting the use of stablecoins for the settlement of financial transactions by banks will spur demand and drive innovation in global payments. Tech Mahindra’s strategic collaboration with Quantoz will enable lower transaction processing costs, bring-in military-grade security and drive faster settlements. Banks can benefit significantly from stablecoins as they will help them compete with Fintech, that are transforming payment systems and prevent exit of customers to other avenues for payments and money remittances,” said Rajesh Dhuddu, Blockchain and Cybersecurity Practice Leader, Tech Mahindra.
For the Stablecoin-as-a-Service offering, Tech Mahindra’s core role will involve helping customers integrate Quantoz’ NEXUS platform into their existing infrastructure, which will enable automated token, crypto, and fiat transaction processing for a variety of banking and payment functions.
The entities did not ascertain whether they will develop a native Stablecoin for the product.
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