Tech Mahindra developing a Stablecoin service targeting banks

TL;DR Breakdown

• Tech Mahindra launches stablecoin-as-a-service blockchain tool.
• Tool launched in partnership with Netherlands-based Quantoz.
• Stablecoins can ease the cost and time taken to process transactions.

Indian tech multinational Tech Mahindra Ltd. has teamed up with Dutch blockchain application incubator Quantoz to build a new blockchain stablecoin service targeting global financial institutions. The two tech firms aim to take advantage after the Office of the Comptroller of Currency (OCC) cleared federal banks in the United States to make use of stablecoins for regular banking operations like making payments and processing transactions. The move will promote the regulated adoption of blockchain technology and could potentially drive its adoption among banks. 

The introduction of Bitcoin in 2009 by the mysterious Satoshi Nakamoto dawned a new age for the financial world. Like any other new technology, Bitcoin has suffered its fair share of criticism over the years. One of the major rationales used to invalidate cryptocurrencies like Bitcoin and Ethereum is the inherent price volatility. Although volatility is prevalent among crypto assets during their early days, several solutions have been deviced to address this issue. 

Stablecoins rise in popularity

Stablecoins have made huge strides over the last couple of years into becoming an important constituent of the core elements of the cryptocurrency ecosystem. Two of the most phenomenal crypto trends of 2020 were the rise of DeFi and the expansion of stablecoins. The most common stablecoins are backed by fiat currencies. The equivalent fiat currency is held in reserves and can be given in exchange for the stablecoin. 

Using stablecoins to process payments has vital benefits such as mitigating transaction cost and time taken to process, and on top of that, provide more security and audibility. Within the partnership frameworks, Tech Mahindra will help banks tap Quantoz’s NEXUS platform into their legacy finance network. This will activate automated tokens, fiat, and cryptocurrency processing for various banking and settlement functions. The NEXUS blockchain platform can manage multi tasks such as loyalty management, treasury management, remittances, and ecosystem settlements. 

Blockchain key to Tech Mahindra’s digital transformation

Blockchain technology has been a mainstay in the Indian tech corporation’s digital switch portfolio. As a leading digital transformation provider, Tech Mahindra was included in the 2021 Forbes top 50 blockchain companies list earlier this year. The new strategic partnership with Netherlands-based Quantoz marks the second time the two tech companies have teamed up for digital payments. 

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