Deutsche Bank and Standard Chartered's SC Ventures announced that they are currently testing a system that could potentially revolutionize the way transactions are carried out.
Deutsche Bank Tested a New System Between Stablecoins and Digital Currencies
Known as the Universal Digital Payments Network (UDPN), the system is designed to facilitate communication between blockchain-based transactions, stablecoins and central bank digital currencies (CBDCs).
This approach is similar to the SWIFT messaging system used in traditional banking infrastructure.
UDPN is described as an interoperability bridge between blockchains. For example, in a cross-border currency transfer, the sending institution tokenizes the asset to be sent and transfers it to a smart contract managed by UDPN.
The network then releases the targeted currency from this smart contract. According to the information disclosed, the system was developed by technology consultancy company GFT Group and Red Date Technology, the founding partner of the China Blockchain Based Service Network (BSN).
SC Ventures CTO Thorsten Neumann said in his statement: “UDPN is a network where members' connections are subject to permission. But the key here is that the transactions themselves are embedded in the underlying infrastructure that includes permissionless networks.”
Neumann explained that this process almost mimics a DeFi-type capability within a permissioned network.
*This is not investment advice.
