The ‘SWIFT’ of Stablecoins and CBDCs Is What a Chinese Blockchain Project Wants to Be.
A business that has experience developing China’s national blockchain initiative has established a SWIFT-style system for bank-issued and controlled digital currencies.
A blockchain startup with headquarters in Hong Kong has introduced a digital payments platform intending to bridge the divide between stablecoins and Central Bank Digital Currencies (CBDCs).
The Universal Digital Payment Network (UDPN) was introduced on January 19 at the World Economic Forum (WEF) 2023 conference in Davos, Switzerland, by Red Date Technology, a blockchain infrastructure company that is also in charge of one of China’s blockchain initiatives.
The UDPN is a distributed ledger technology (DLT) platform, according to its whitepaper, that would function similarly to what the SWIFT network does for banks but for stablecoins and CBDCs.
UDPN development is also supported by the digital asset generation engine TOKO from the law firm DLA Piper and the tech engineering business GFT Technologies.
“Just as the SWIFT network created the original common standard for messaging between financial institutions across different settlement systems, the UDPN will serve the same purpose for the emerging generation of CBDCs and stablecoins.”
“Several of global tier 1 banks” are reportedly already engaged in use-case proof of concepts (POCs) to test the network in cross-border transfers and swaps, according to a press release from January 19.
Although the statement did not specify which banks participated in the POCs, a panel at the UDPN launch in Davos included representatives from Deutsche Bank, HSBC, Standard Chartered, The Bank of East Asia, and Akbank.
Also kept secret were the stablecoins that will be used in the POC. The networks whitepaper does state, however, that it only supports “CBDCs and regulated fiat-backed stablecoin currency systems as payment methods,” adding:
“No unregulated public-chain crypto-currencies, such as Bitcoin, will be accepted.”
There are eight more proof-of-concept tests planned for the network, including the creation and circulation of stablecoins issued by banks and the CBDC, as well as the use of UDPN as an e-commerce payment gateway.
Red Date has been working on the UDPN for almost two years.
The business was well-known for its work on China’s national blockchain initiative, Blockchain-based Service Network (BSN), before introducing this digital payments system.
The BSN stated that it intended to create a global CBDC system that “would fundamentally transform the current payment and circulation mechanism, enabling an uniform digital currency transfer method and payment procedure for any information system” in a now-deleted roadmap posted on Jan. 15, 2021.
Red Date’s role in leading China’s blockchain initiative and the nation’s own CBDC efforts with its digital yuan is not mentioned in the most recent whitepaper.
Previously, in June 2022, Red Date’s CEO, Yifan He, called cryptocurrencies the “biggest Ponzi scheme in human history.”