The Universal Digital Payments Network (UDPN) was launched today at the World Economic Forum to provide interoperability between regulated stablecoins and central bank digital currencies (CBDCs).
UDPN has been in development for the last two years with contributions from GFT, Red Date Technology, TOKO, and DLA Piper. A sandbox was launched in July of 2022, where multiple banks were actively testing stablecoin transfer and FX transactions.
The network was launched at Davos with a panel discussing the rapidly evolving digital currency, interoperability, and infrastructure. The panel included representatives from Deutsche Bank, HSBC, Standard Chartered, The Bank of East Asia, and Akbank.
The UDPN reports that several Tier 1 banks will participate in a series of proof-of-concept use cases throughout the rest of this month to demonstrate how UDPN could be used to solve current and future challenges in integrating digital currency into daily business, banking and payment scenarios.
The first two of these proof-of-concepts will involve two global banks testing UDPN’s digital currency cross-border transfer and swap transaction capabilities, and how the critical “Travel Rule” can be easily implemented on the UDPN between two financial institutions for anonymous stablecoin transfers.
“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,” said 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.”
Fast facts
- 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 was developed in the last two years by decentralized cloud infrastructure company Red Date Technology, IT solutions provider GFT, TOKO and DLA Piper.
- Red Date Technology is also 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,” said Marika Lulay, CEO of GFT. “The decentralized 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 will 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.