Davos-launched blockchain project aims to be the “SWIFT” of stablecoins and CBDCs
A Hong Kong-based blockchain company has launched a digital payment system that aims to bridge the gap between stablecoins and central bank digital currencies (CBDCs).
Red Date Technology, the blockchain infrastructure firm that also leads one of China’s blockchain ventures, launched the Universal Digital Payment Network (UDPN) on January 19 during the World Economic Forum (WEF) 2023 meeting in Davos, Switzerland.
Technical engineering company GFT Technologies and the digital asset creation engine TOKO from the law firm DLA Piper are also contributors to the UDPN development.
According to the white paper, UDPN is a distributed ledger technology (DLT) platform that will serve a similar purpose to what the SWIFT network does for banks, except for stablecoins and CBDCs.
“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 new generation of CBDCs and stablecoins.”
According to a January 19 press release, a “number of global tier 1 banks” are already involved in proof of concepts (POCs) use cases to test the network in cross-border transfers and swaps.
The release did not reveal which banks participated in the POCs, but Deutsche Bank, HSBC, Standard Chartered, The Bank of East Asia and Akbank were represented on a panel at the UDPN launch in Davos.
The stable coins to be used in the POC were also not revealed. However, the network’s whitepaper says it only supports “CBDCs and regulated fiat-backed stablecoin currency systems as payment methods,” adding:
“No unregulated public chain cryptocurrencies, such as Bitcoin, will be accepted.”
Eight other proof-of-concept tests are planned for the network, including the issuance and circulation of a CBDC and bank-issued stablecoin and the use of UDPN as an e-commerce payment gateway.
Related: Going cashless: Norway’s digital currency project raises privacy issues
UDPN has been developing Red Date for almost two years
Before launching this digital payment system, the company was known for its work on the Blockchain-based Service Network (BSN), China’s national blockchain project.
In a now-deleted roadmap published on January 15, 2021, BSN said it plans to build a global CBDC system that “will completely change the current payment and circulation method, enabling a standardized digital currency transfer method and payment procedure for all information systems.”
The latest white paper makes no mention of Red Date’s involvement in managing China’s blockchain project, nor of the country’s own CBDC efforts with its digital yuan.
A spokesperson for the project told Cointelegraph that there is no connection between BSN and UDPN, as the latter is “administered and governed in a decentralized manner.”
In June, Red Date’s CEO, Yifan He, called cryptocurrencies the “biggest Ponzi scheme in human history.”
Update (January 23, 06:40 UTC): Added comment from UDPN spokesperson.
