STASIS EURO

USDC

<p>SC Ventures, the Singaporean disruptive technology investment subsidiary of UK banking conglomerate Standard Chartered, has partnered with Deutsche Bank in completing the first successful proof of concept (PoC) for the Universal Digital Payments Network (UDPN).</p><h2 id="header-0">Connecting blockchain networks with CBDCs</h2><p>The UDPN is a brainchild of Hong Kong’s Red Date Technology, which in turn is a co-founder of the Chinese Blockchain-Based Service Network (BSN). The PoC was aimed at facilitating seamless connections between central bank digital currencies (CBDCs) and various blockchain networks through message-based transactions.</p><p>News of the successful PoC emerged via a <a href="https://www.financialexpress.com/business/banking-finance-deutsche-bank-sc-ventures-complete-first-digital-currency-transfer-and-swap-on-the-universal-digital-payments-network-3284092/" rel="noopener noreferrer nofollow">report</a> by India’s English-language business newspaper Financial Express earlier this week. In conventional finance and international payments, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) is the foremost, dominant financial messaging service. Notably, UDPN distinguishes itself from SWIFT as it operates on a permissioned blockchain, ensuring heightened security and regulatory compliance.</p><p>As part of the PoC, several real-time transfers and swaps of synthetic USDC and EURS (Stasis Euro stablecoin) were executed between the two banks. While SC Ventures utilized code that leveraged UDPN software development kits (SDKs) and APIs, Deutsche Bank employed a graphical user interface. Rafael Otero, CTO and CPO of Deutsche Bank’s Corporate Bank division, emphasized the significance of this trial, stating that it provides an opportunity to explore how clients can actively engage in the decentralized global economy. Otero sees this as the logical next step in the evolution of financial transactions.</p><h2 id="header-1">Overcoming digital currency adoption challenges</h2><p>UDPN has been under development in collaboration with consultancy firm GFT Technologies and DLA Piper’s Hong Kong-based digital asset creation platform, TOKO, with further governance provided by the UDPN Alliance.</p><p>The primary goal of UDPN is to overcome the hurdles that hinder the broader adoption of digital currencies, especially in the face of the surging number of CBDCs, stablecoins, and deposit tokens. The lack of interoperability among these digital assets necessitates innovative solutions.</p><p>Currently, interoperability among stablecoins primarily relies on centralized cryptocurrency exchanges. However, due to the absence of proper oversight and regulatory framework in these exchanges, this method is not a sustainable solution for achieving interoperability between CBDCs and deposit tokens.</p><p>UDPN takes a unique approach by providing a decentralized identity infrastructure. The actual currency transactions occur on their respective native blockchains or infrastructures. This means that UDPN enables users to seamlessly swap a USDC stablecoin on one network for a Euro stablecoin on another or even a bank deposit token.</p><h2 id="header-2">Improving upon financial messaging systems</h2><p>As UDPN incorporates an element of financial messaging for digital currencies, this hybrid approach streamlines transactions, eliminates the need for reconciliations, and enables atomic settlement. Therefore, UDPN ensures that either both sides of a transaction succeed or both fail. In contrast, purely messaging-based systems can result in one side of the transaction failing.</p><p>SWIFT recently experimented with a messaging solution to connect CBDCs, and other conventional integration methods are being explored, involving APIs and routing networks, such as finP2P. It has <a href="https://medium.com/&#64;coinness.gl/hong-kong-and-kazakhstan-pilot-swifts-cbdc-solution-952d740fc9d8" rel="noopener noreferrer nofollow">collaborated</a> with the central banks of Hong Kong and Kazakhstan recently in testing CBDC connectors.</p><p>A <a href="https://medium.com/&#64;coinness.gl/standard-chartered-muscling-into-asian-crypto-space-3a26f2c5b03e" rel="noopener noreferrer nofollow">report</a> by Nikkei Asia last week suggested that Standard Chartered is venturing further into the world of digital currencies, particularly so in Asia, via SC Ventures.</p>

SC Ventures and Deutsche Bank Execute Stablecoin Payments via UDPN

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