TCS Solution To Enable CBDC Issuance For Banks

Tata Consultancy Services (TCS) on Tuesday announced its enhanced solution to enable central and commercial banks to support the entire lifecycle of Central Bank Digital Currency (CBDC) issuance, book-keeping and transactions.

The company’s enhanced Quartz™ solution provides the capability to issue, trade and settle a variety of traditional as well as tokenized assets, and handle payment transactions.

TCS has upgraded its solution to enable central banks to be able to manage the issuance and distribution of CBDCs while allowing commercial banks to transact with other banks and payment services providers using CBDCs as well as offer their customers the ability to hold CBDC balances.

Earlier this week, The Reserve Bank of India (RBI) said that they were making plans to begin the pilot phase of introducing the central bank digital currency (CBDC), the digital rupee.

The digital equivalent of government-issued bank notes, a CBDC can help a central bank move towards a globalised, secure, cost-effective, and traceable payments settlement system, while also promoting financial inclusion and helping counter threats that can arise from unregulated cryptocurrency markets. 

In this context, TCS solution could find major interest coming from Indian banks including the RBI.

The Quartz solution’s configurable, hierarchical account structure is designed to bring in flexibility to support each country or region’s CBDC adoption model guided by the local monetary policy and financial inclusion strategies. This account structure allows CBDC balances to be held in consolidated as well as segregated form, along with near real-time synchronisation with central bank systems.

In a statement, Vivekanand Ramgopal, President, BFSI Products and Platforms, TCS said, “We have extended the capabilities of our Quartz solution to help our customers in central banking, financial services, payments, and other industries to adapt to this strategic transformation. Further, its co-existent microservices architecture enables financial institutions to introduce these next generation services even as they retain their existing systems.”

The solution’s coexistence strategy could help banks and other organisations in rolling out CBDC based services with minimal impact. The Quartz Gateway, through its microservices architecture and availability of REST APIs, can help banks integrate the new solution with their existing applications. Banks can invoke these APIs for CBDC transactions related to payments, settlements, and cross-border transactions in the same manner as with fiat currencies.