Red Date Technology, a business with experience constructing China’s national blockchain initiative has established a SWIFT-style system for bank-issued and controlled digital currency.
A Hong Kong-based blockchain firm has built a digital payments system to bridge the gap between stablecoins and Central Bank Digital Currencies (CBDCs).
The Universal Digital Payment Network (UDPN) was announced on January 19 during the World Economic Forum (WEF) 2023 conference in Davos, Switzerland, by Red Date Technology. This blockchain infrastructure startup is also driving one of China’s blockchain endeavors.
GFT Technologies, a technology engineering business, and DLA Piper’s TOKO digital asset generation engine are also contributing to UDPN development.
The UDPN, according to its whitepaper, is a distributed ledger technology (DLT) platform that would function similarly to the SWIFT network for banks but 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 emerging generation of CBDCs and stablecoins.”
“Several global tier 1 banks,” according to a January 19 press release, are already engaging in use-case proof of concepts (POCs) to test the network in cross-border transfers and swaps.
The banks involved in the POCs were not disclosed in the statement. However, Deutsche Bank, HSBC, Standard Chartered, The Bank of East Asia, and Akbank were represented on a panel at the UDPN launch in Davos.
The stablecoins that will be used in the POC were also kept secret. However, the network’s whitepaper states that it only allows “controlled fiat-backed stablecoin currency systems as payment mechanisms,” adding:
“No unregulated public-chain crypto-currencies, such as Bitcoin, will be accepted.”
The network has eight further proof-of-concept tests planned, including the creation and distribution of a CBDC and bank-issued stablecoin, as well as the use of UDPN as an e-commerce payment gateway.
Red Date has been working on the UDPN for about two years.
Prior to developing this digital payment system, the business was recognized for its work on China’s national blockchain initiative, Blockchain-based Service Network (BSN).
The BSN stated in a now-deleted roadmap released on January 15, 2021, that it intended to develop a worldwide CBDC system that would “totally transform the present payment and circulation mechanism, providing a uniform digital currency transfer method and payment procedure for any information system.”
The current whitepaper does not mention Red Date’s term as the project’s leader nor China’s own CBDC ambitions with its digital yuan.
According to a project spokeswoman, there is “no relationship between BSN and UDPN” because the latter is “controlled and administered in a decentralized fashion.”
Previously, Red Date CEO Yifan dubbed cryptocurrency the “largest Ponzi scheme in human history” in June 2022.