A consortium of three companies has rolled out a new digital payments offering to facilitate interoperability between regulated stablecoins and central bank digital currencies (CBDCs).
Dubbed Universal Digital Payments Network (UDPN), the offering was launched at the recently held World Economic Forum (WEF) 2023 conference in Davos, Switzerland
The cross-border digital currency payments solution has been developed by Germany’s GFT, Red Date Technology and TOKO, a digital asset initiative of DLA Piper, over a period of two years.
It has been designed to minimise the cost of digital payments as well as speed up the adoption of digital currency by banks and businesses of different sizes.
As part of the development of UDPN, a sandbox was created in July last year, where various banks undertook the testing of stablecoin transfer and swap (FX) transactions.
The partnership also plans to perform a set of use cases proof-of-concept (POC) studies this month to show the use of UDPN in solving the existing and future challenges of combining digital currency with daily business, banking and payment setups.
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A number of global Tier 1 banks are set to take part in the tests.
The initial two POCs will see two banks testing UDPN’s digital currency international transfer and swap transaction competences.
They will also test how financial institutions can implement anonymous stablecoin transfers through the ‘travel rule’ feature.
GFT CEO Marika Lulay said: “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.
“The decentralised approach and geographic breadth of participating firms, combined with the advanced technological solution deployed for these trials, set this network apart.”