- UDPN aims to serve CBDCs and Stablecoins through the incorporation of scalability and interoperability.
- UDPN’s whitepaper highlights some crucial features and solutions ahead of its commercialization stage.
As demand for CBDCs and stablecoins rises, Stellar Lumens might have a promising competitor, vying for its customers’ attention.
The Universal Digital Payment Network (UDPN), was just unveiled in Switzerland, at the recently held World Economic Forum (WEF) 2023 in Davos.
UDPN’s white paper describes the ecosystem as a distributed ledger technology (DLT). UDPN aims to do for CBDCs and Stablecoins, what SWIFT is doing for financial firms as a messaging system. The network mirrors SWIFT, as an option for fixing the barriers between stablecoins and central bank digital currencies (CBDCs).
UDPN is also backed by Red Date Technology, one of Hong Kong’s most valuable Blockchain companies. The Red Date Technology centers its activists around next-generation Public IT System infrastructures. Red Date Technology has also been working to develop UDPN for over a year.
UDPN is also affiliated with TOKO and GTF technologies. Both platforms have also been contributing to accelerating UDPN’s network growth.
The UDPN whitepaper discloses many observations of the current state of the CBDC market. Even as more countries move towards creating their own CBDCs and stablecoins, UDPN believes that the lack of an official messaging platform across the industry could slow down adoption.
In the whitepaper, the necessity for scalability and universal interoperability is also emphasized. Both features will foster the sustainable advancement of stablecoins and CBDCs. The whitepaper added;
The UDPN addresses these issues by providing a global payment messaging network to support stablecoins and CBDCs across decentralised and centralised currency systems. The UDPN will provide a shared, decentralised network and associated standards; the messaging backbone for efficient and seamless cross-border digital currency payments across protocols and systems.
UDPN presents key solutions for CBDCs and Stablecoins
Aside from changing transactions between digital account systems, UDPN will also enable traditional messaging systems. Commercial banks will have quick access to partake in the decentralized economy. UDPN will enable this, by providing capital pools and building relationships with local central banks to banks, to help them offer cross-border transactions.
Other noteworthy solutions were listed in the whitepaper, along with some regulatory pathways the network is taking, so as to maintain order and avoid sanctions.
The network will support only CBDCs and regulated fiat-backed stablecoin currency systems as payment methods. No unregulated public-chain crypto- currencies, such as Bitcoin, will be accepted. The addition of any new currency is subject to a vote by the UDPN Alliance members as part of the network’s decen- tralised governance approach.
The whitepaper explained, adding that there will be no provision of custodial services.
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The beta version of UDPN already went live in the last quarter of 2022. Pilot commercialization has now been scheduled for the second half of 2023.
Once launched, UDPN will have 8 alliance members as its main group of founders. It will later move to 16 and finally 24. Strategy, governance, and roadmap will be handled by the alliance members after voting is concluded.