Deutsche Bank and Standard Chartered test an option to SWIFT for digital currencies
The UDPN, or Universal Digital Payments Network, has been tested for use with digital currency transactions by both Deutsche Bank and Standard Chartered.
Deutsche Bank and Standard Chartered are at the forefront of a revolutionary approach that might transform international transactions using digital currency.
These banking behemoths are actively developing the Universal Digital Payments Network (UDPN), which might revolutionize blockchain-based financial transactions.
UDPN was created by GFT Group, a technology consultant, and Red Date Technology, a co-founder of the Chinese Blockchain-Based Service Network (BSN), with the intention of serving as a permissioned blockchain system. Stablecoins on public blockchains and central bank digital currencies (CBDCs) are only two examples of the types of digital assets that may be seamlessly transacted between using this technology.
When transferring money internationally, financial institutions often first convert the funds into a token before depositing them into a UDPN-managed smart contract. Instead of using a centralized messaging system like SWIFT, this smart contract may directly release the desired funds.
Importantly, the Universal Digital Payments Network is not a standalone entity. It provides a missing link in the blockchain and digital currency ecosystem by facilitating communication across different blockchain networks. Furthermore, it applies recognized decentralized digital identification standards (DIDs) to participants, guaranteeing that all business is conducted in a safe and governed setting.
There are more financial institutions involved besides Deutsche Bank and Standard Chartered. About 25 organizations from the US, Australia, Latin America, and Europe are presently members of the UDPN. Roughly 10 proof-of-concept experiments are being carried out in parallel by these organizations.
To further simplify and standardize the administration of blockchain-based transactions in private settings, the banking sector has launched this endeavor. UDPN’s emphasis on interoperability and decentralized identification standards might make it an attractive option for digital currencies to exchange information in a safe and reliable manner, leading to faster and less costly international transactions.