An interesting announcement relating to the payments industry has materialised from the World Economic Forum by the name of The Universal Digital Payments Network (UDPN).
The UDPN was launched to provide interoperability between regulated stablecoins and central bank digital currencies (CBDCs).
UDPN is an “advanced digital currency payments project” that “has the potential to drive down the cost of digital payments and accelerate adoption by banks and businesses of all sizes.”
The payment network has been developed in the last two years by decentralised cloud infrastructure company Red Date Technology, IT solutions provider GFT, TOKO and DLA Piper.
Red Date Technology is also known as the developer of the Blockchain-based Service Network (BSN), the China state-backed blockchain network.
The initiative has since been expanding overseas through cooperation with global enterprises on the international version of the network, BSN Spartan.
“The purpose of UDPN is to investigate a potential alternative to existing payments systems by enabling interoperability between fiat-backed tokens of stablecoins and regulated protocols,” comments Marika Lulay, CEO of GFT.
“The decentralised approach and geographic breadth of participating firms, combined with the advanced technological solution deployed for these trials, set this network apart.”
UDPN also enables enterprise IT systems to incorporate different digital currencies.
Multiple global banks are reported to have signed up to participate in use case proof of concepts (POCs) this month, to show how the UDPN will integrate digital currencies into daily businesses, banking and payment.
The first two POCs will involve two banks testing UDPN’s digital currency cross-border transfer and swap capabilities, and how financial institutions can execute anonymous stablecoin transfers through the “travel rule” function.
BSN had revealed its plans to develop a universal digital payments network (UDPN) based on standardised procedures for international transfers and payments with and between central bank digital currencies (CBDCs) as early as 2021.
The state-sanctioned blockchain network aimed to roll out the UPDN in beta as early as H2 2021 as part of its roadmap for “enabling new features and functions” and “to accelerate the mass adoption of blockchain technology worldwide”.
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