Universal Digital Payment Network targets interoperable stablecoins, CBDCs – Ledger Insights

The Universal Digital Payment Network (UDPN) was launched yesterday at the World Economic Forum in Davos. It is a blockchain-based network to provide interoperability between regulated stablecoins and CBDC. The three firms behind the initiative are German digital consultancy GFT, Red Date Technology and DLA Piper’s digital asset initiative TOKO.

“The purpose of UDPN is to investigate a potential alternative to existing payments systems by enabling interoperability between stablecoins’ fiat-backed tokens and regulated protocols,” said Marika Lule, CEO of GFT. “The decentralized approach and geographic breadth of participating institutions, combined with the advanced technology solution deployed for these trials, set this network apart.”

Also Read :  Palestinian killed in clashes with Israeli army in West Bank: Palestinian ministry

It plans to work with stablecoins and CBDCs to disrupt decentralized and centralized currency systems. It says it supports regulated fiat-based stablecoins, but “unregulated public-chain cryptocurrencies like Bitcoin are not accepted.” The addition of any new currency is voted on by the UDPN Alliance members and allowed based on the DLT Network Hyperledger Besu.

We wrote about the concept two years ago when the idea of ​​UDPN was first floated as part of the Blockchain-based Service Network (BSN), a Chinese initiative to enable global interoperability between blockchain networks. Red Date Technology launched BSN, but was not mentioned in the BSN announcement or the UDPN whitepaper, so the project now appears to be independent.

Also Read :  Montenegro and Rhodes offer beautiful beaches, mountains and food – so get booking your summer hol now!

The network developed a sandbox and started with two proofs of concept (PoCs). One is cross-border transfers using digital currency and FX transactions in partnership with Standard Chartered and Deutsche Bank. Another is to implement a travel rule for stablecoin transfers. Intermediaries are required to send details of the payment, payer and recipient for anti-money laundering purposes.

Many other use cases are envisioned, including enabling the use of stablecoins without requiring users to hold cryptocurrencies for gas fees. The business pays for the gas and sends them into stablecoins. Another use case is tokenization.

Also Read :  Turkey vows to defend interests against Greece amid tensions

UDPN also named three other banks attending the Davos launch: HSBC, Bank of East Asia and Turkey’s Akbank. HSBC was also involved in the launch of the BSN Spartan network last year.

The announcement refers to UDPN as a global payment messaging network. In particular, messaging networks are generally not required to comply with payment system regulations. SWIFT is a payment messaging network, but is subject to regulatory oversight only because it has become systemically important.


Leave a Reply

Your email address will not be published.