Tech Mahindra Ltd has partnered Quantoz, Netherlands-based blockchain application incubator, to launch ‘stablecoin-as-a-service’ blockchain solution for global banks and financial institutions.

The usage of Stablecoins as a payment mechanism have significant potential to reduce transaction costs and processing time, while providing auditability and enhancing security.

“This collaboration is in consideration of the OCC (Office of the Comptroller of Currency) announcement allowing federally chartered US banks to use stablecoins for standard banking functions like payments and transactions. This will accelerate the regulated use of blockchain and has the potential to boost its adoption across banking vertical," Tech Mahindra stated in a statement.

Stablecoins are digital tokens that offer stability by pegging their value to certain assets like fiat currency or commodities. In addition to optimizing digital payments, stablecoins also enables enhanced functionalities like internet of things (IoT) payments, micropayments, programmable payments, and cross spending across payment ecosystems.

“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," stated Rajesh Dhuddu, Blockchain and Cybersecurity Practice Leader, Tech Mahindra.

As part of the engagement, Tech Mahindra will help customers integrate Quantoz’ NEXUS platform into their legacy infrastructure, which will enable automated token, crypto and fiat transaction processing for a variety of banking and payment functions.

Tech Mahindra provides a holistic framework called ‘Block Ecosystem’ which can be used to create valuable applications that create value for customers.