A blockchain startup headquartered in Hong Kong has introduced a digital payments platform 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 also in charge of one of China’s blockchain initiatives.
UDPN development is also supported by the digital asset generation engine TOKO from the law firm DLA Piper and the tech engineering company GFT Technologies.
Red Date has been working on the UDPN for almost two years. Before releasing this electronic payment system, the business was renowned for its work on China’s national blockchain initiative, the Blockchain-based Service Network (BSN).
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.
In use-case proof of concepts (POCs) to test the network in cross-border transfers and swaps, “a number of global tier 1 institutions” have already participated, 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. However, according to the network’s whitepaper, the only accepted payment methods are regulated fiat-backed stablecoin systems and CBDCs. No unregulated public-chain crypto-currencies, including Bitcoin, will be accepted, they further added.
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 and the use of UDPN as an e-commerce payment gateway.
The BSN stated that it intended to create a global CBDC system that “would fundamentally transform the current payment and circulation mechanism, enabling a uniform digital currency transfer method and payment procedure for any information system” in a now-deleted roadmap posted on January 15, 2021.
Red Date’s role in leading China’s blockchain initiative and the nation’s CBDC efforts with its digital yuan is not mentioned in the most recent whitepaper. However, a project representative made it clear that there is absolutely no relationship between BSN and UDPN because the latter is run and administered in a decentralized fashion.