A Hong Kong blockchain company has launched a digital payments system that aims to bridge the gap between stablecoins and central bank digital currencies (CBDCs).
Red Date Technology, the blockchain infrastructure company that is also leading one of China’s blockchain efforts, launched the Universal Digital Payment Network (UDPN) on January 3. 19 During the World Economic Forum (WEF) 2023 meeting in Davos, Switzerland.
According to its white paper, UDPN is a distributed ledger technology (DLT) platform that would serve a similar purpose to what SWIFT does for banks, but for stablecoins and CBDCs.
Technical engineering firm GFT Technologies and DLA Piper law firm TOKO digital asset creation engine 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 emerging generation of central bank and stablecoin currencies.”
According to Jan. 19 press release “A number of global Tier 1 banks” are already participating in proof-of-concept use cases (POCs) for network testing in cross-border transfers and exchanges.
The statement did not disclose which banks were participating in the POCs, but Deutsche Bank, HSBC, Standard Chartered, East Asian Bank and Akbank were represented on a panel at the UDPN launch event in Davos.
The stablecoins that will be used in the POC are also not disclosed. However, the networks white paper notes that they only support “central bank digital currencies and securities-backed stablecoin systems as payment methods,” adding:
“No public chain unregulated cryptocurrencies, such as Bitcoin, will be accepted.”
Eight more proof-of-concept tests of the network are scheduled, including the issuance and trading of a central bank digital currency, bank-issued stablecoins, and the use of UDPN as an e-commerce payment gateway.
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UDPN was developed by Red Date nearly two years ago.
Prior to launching this digital payments 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 posted on January 3. On September 15, 2021, BSN said that it plans to build a global CBDC system that “will completely transform the current payment and trading method, enabling a unified method of digital currency transfer and payment procedures for any information system.”
The recent white paper makes no mention of the Red Date period of guiding blockchain projects in China, nor the country’s own CBDC efforts with its own digital yuan.
Previously, in June 2022, Red Date CEO Yifan He called cryptocurrencies “the largest Ponzi scheme in human history.”
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