Information technology (IT) services major Tech Mahindra has partnered with Netherlands blockchain incubator Quantoz to launch ‘stablecoin-as-a- service’ offering for the banking, financial services and insurance (BFSI) sector.
The platform, as per a statement, will help banks and financial institutions handle multiple functions such as loyalty management, remittances, ecosystem payments and treasury management.
Stablecoins refer to a type of cryptocurrencies whose value is tied to an outside asset, such as gold, silver or the US dollar, in order to make the price more predictive and stable.
Tech Mahindra said that stablecoins have the potential to reduce transaction costs and processing time, provide auditability and boost security.
Stablecoins also can be linked to enhanced functionalities such as internet of things (IoT) payments, micropayments, programmable payments and cross spending across payment ecosystems.
“Banks can benefit significantly from stablecoins as they will help them compete with fintechs that are transforming payment systems, and prevent exit of customers to other avenues for payments and money remittances,” Rajesh Dhuddu, blockchain and cybersecurity practice leader at Tech Mahindra, said.
In January this year, the Office of the Comptroller of Currency in the US allowed federally chartered US banks to use stablecoins for standard banking functions such as payments and transactions.
The stablecoin-as-a-service solution looks to tap into the sector as it expects the accelerated use of blockchain and rise in adoption of the banking vertical in the US and other geographies.
As part of the service offering, Tech Mahindra will help customers integrate Quantoz Nexus platform into their legacy infrastructure, which will enable automation of token, crypto and fiat transaction processing for various bank functions, the company said.
“With our recent ISO 27001 certification for information security management and our compliance-by-design methodology, we believe we have a superior stablecoin offering that can bring numerous benefits for standard banking services,” Henri de Jong, chief business development officer of Quantoz, said.
Tech Mahindra is already investing heavily in the area of blockchain through its framework called the Block Ecosystem. The framework has various levers for blockchain such as Block Studio, Block Engage, Block Talk and Block Geeks, among others, to build crypto based solutions for clients.