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(Kitco News) –
The ambitious new Universal Digital Payments Network (UDPN), which is designed to provide interoperability between fiat-backed stablecoins, central bank digital currencies (CBDCs), and regulated protocols was launched earlier today at the World Economic Forum in Davos, Switzerland.
UDPN was developed by Red Date Technology, which also developed BSN, China’s state-backed blockchain network, together with German IT solutions provider GFT, Japanese electronics firm TOKO and U.S. law firm DLA Piper.
“The purpose of UDPN is to investigate a potential alternative to existing payments systems by enabling interoperability between fiat-backed tokens of stablecoins and regulated protocols,” said Marika Lulay, CEO of GFT. “The decentralized approach and geographic breadth of participating firms, combined with the advanced technological solution deployed for these trials, set this network apart.”
In a now-deleted blog post from January 2021 outlining their product roadmap, BSN said that UDPN “will completely change the current payment and circulation method, enabling a standardised digital currency transfer method and payment procedure for any information system.”
They wrote that CBDCs are increasingly being adopted around the world, and central banks consider them essential as cash use is steadily declining. “BSN plans to build a digital currency payment network in five years based on the CBDCs of various countries and stablecoins, working with several international banks and technology companies,” they wrote at the time.
Multiple global banks are scheduled to participate in use case proofs-of-concept (POCs) in the coming weeks to demonstrate the ways UDPN will integrate digital currencies into daily business activities involving banking and payments.
China’s ongoing pilot program for their own CBDC, the digital yuan, now involves 26 large cities and 5.6 million merchants and saw an accumulated transaction value of 100 billion yuan ($12.2 billion) from consumer spending, bank lending and cross-border payments by the end of August 2022.
Development of the digital yuan began in 2019, and the public pilot program for the e-CNY launched in April 2020. In December 2022, the PBoC revealed its intentions to once again expand the program to include the cities of Jinan in the Shandong Province, Nanning and Fangchenggang in the Guangxi Zhuang Autonomous Region, Kunming in the Yunnan Province, and the Xishuangbanna Dai Autonomous Prefecture in the near future.
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Read More: Universal Digital Payments Network for stablecoins and CBDCs launches at Davos