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Blockchain
TechTech Trends

Company behind China’s state-backed blockchain project aims to create Swift for stablecoins and CBDCs

  • The Universal Digital Payments Network facilitates cross-border payments between stablecoins with plans for central bank digital currencies
  • Red Date Technology, which develops the Blockchain Service Network, announced the launch of the network at the World Economic Forum in Davos

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Red Date Technology, the state-backed company behind the Blockchain Service Network, hopes its new Universal Digital Payments Network will serve the same role as the Society for Worldwide Interbank Financial Telecommunication (Swift), but for stablecoins and central bank digital currencies. Photo: Bloomberg
Xinmei Shen

Hong Kong-based Red Date Technology, the technical architect for China’s state-backed Blockchain-based Service Network (BSN), is collaborating on a new initiative that aims to make stablecoins and central bank digital currencies (CBDCs) interoperable in order to facilitate cross-border payments.

Red Date and partners GFT, an IT solutions provider, and Toko, a digital asset creation platform, announced the launch of the Universal Digital Payments Network (UDPN) on Thursday at the World Economic Forum in Davos. The goal is to let enterprises from different countries “transact and settle in different regulated digital currencies”, according to a UDPN white paper.

“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,” the companies wrote in the paper.

The Society for Worldwide Interbank Financial Telecommunication (Swift) is the most widely used system for transferring funds between banks worldwide. Stablecoins are seen by some as a convenient way of bypassing Swift, as they are pegged to a specific currency or a basket of currencies.

A number of “global Tier 1 banks” will participate in a series of proof-of-concept trials from January to June, according to Red Date, during which they will explore how UDPN addresses challenges of “integrating digital currency into daily business, banking, and payment scenarios”, the firm said.

Red Date did not disclose the names of the banks. But representatives from international banks including Deutsche Bank, Hongkong and Shanghai Banking Corporation (HSBC), Standard Chartered and the Bank of East Asia participated in a panel discussion with Red Date at the UDPN launch event.

Red Date said the project currently supports four stablecoins: USDC, USDP, EUROC and EURS.

One of UDPN’s proof-of-concept tests targets CBDCs, according to the project’s official website, exploring “how two commercial banks using UDPN infrastructure can manage, issue, and circulate a token-based central bank digital currency”.

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