2023 – Chinese blockchain project aims to be “SWIFT” for stablecoins and CBDCs.

A Hong Kong-based blockchain company has launched a digital payment system designed to bridge the gap between stablecoins and central bank digital currencies (CBDCs).

Red Date Technology, a blockchain infrastructure company that is also leading one of the blockchain initiatives in China, launched the Universal Digital Payments Network (UDPN) on January 19 at the World Economic Forum (WEF) 2023 meeting in Davos, Switzerland.

According to the white paper, UDPN is a distributed ledger technology (DLT) platform that will serve the same purpose as the SWIFT network for banks, but for stablecoins and CBDCs.

Engineering and technology firm GFT Technologies and law firm DLA Piper’s digital asset creation engine TOKO are also contributing to the development of UDPN.

“Just as the SWIFT network created the original common standard for messaging between financial institutions across different settlement systems, UDPN will serve the same purpose for the next generation of CBDCs and stablecoins. »

According to a January 19 press release, “a number of global Tier 1 banks” are already participating in use-case proof-of-concepts (POCs) to test the network for cross-border transfers and exchanges.

The statement did not disclose which banks participated in the POC, but Deutsche Bank, HSBC, Standard Chartered, The Bank of East Asia and Akbank were featured on the panel at the UDPN launch in Davos.

A general overview of the UDPN architecture, illustrating CBDC systems connecting to external “transaction nodes”, which in turn connect to “validating nodes” in the chain. Image: UDPN white paper.

The stablecoins that will be used in the POC are also not disclosed. However, the network’s white paper states that it only supports “CBDC and fiat-backed regulated stablecoin currency systems as payment methods,” adding:

“No unregulated public network cryptocurrencies, such as bitcoin, will be accepted. »

Eight more proof-of-concept tests are planned for the network, including the issuance and distribution of CBDC and a bank-issued stablecoin, and the use of UDPN as an e-commerce payment gateway.

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UDPN was developed by Red Date for almost two years.

Prior to launching this digital payment system, the company was known for its work on the Blockchain Based Service Network (BSN), a national blockchain project in China.

In a remote roadmap published on January 15, 2021, BSN stated that it plans to create a global CBDC system that will “completely change the current payment and circulation method by providing a standardized digital currency transfer method and payment procedure for any information system.”

The latest white paper makes no mention of Red Date running a Chinese blockchain project or the country’s own CBDC efforts with its digital yuan.

Earlier in June 2022, Red Date CEO Yifan He called cryptocurrencies “the biggest Ponzi scheme in human history.”

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