HomeNewsRipple and XRP in the Spotlight as Standard Chartered and Deutsche Bank...

Ripple and XRP in the Spotlight as Standard Chartered and Deutsche Bank Challenge SWIFT

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  • The Universal Digital Payments Network (UDPN) emerges as an interoperability bridge, connecting various blockchain networks while ensuring transactions occur in a secure, regulated, and bank-friendly environment.
  • Deutsche Bank and Standard Chartered Ventures are actively engaged in testing the UDPN, with approximately 25 organizations participating, including major banks from the U.S., Australia, Latin America, and Europe.

Deutsche Bank and Standard Chartered’s venture arm, SC Ventures, are at the forefront of a groundbreaking initiative, delving into the potential of blockchain-based transactions, stablecoins, and central bank digital currencies (CBDCs). Drawing inspiration from the traditional SWIFT messaging layer utilized in legacy banking infrastructure, they are running a series of tests on the Universal Digital Payments Network (UDPN).

Bridging the Gap: The Universal Digital Payments Network

The UDPN serves as a permissioned blockchain system, connecting an alliance of banks, financial institutions, and consultancies through validator nodes. Developed in collaboration between GFT Group and Red Date Technology, co-founders of the Chinese Blockchain-Based Service Network (BSN), the system facilitates a seamless exchange of transactions across diverse networks.

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The current tests encompass various scenarios, including the transfer and swap of USDC stablecoins, showcasing the network’s versatility in handling transactions from stablecoins on public blockchains to CBDCs. This approach ensures that the digital currencies serve both as a medium and message, eliminating the necessity of parallel systems like SWIFT messages.

Thorsten Neumann, CTO of SC Ventures, sheds light on the unique attributes of the UDPN, emphasizing its role as an interoperability bridge. He explains that while the network operates on a permissioned basis for participant affiliation, the transactions themselves are executed on the underlying infrastructure, which also accommodates permissionless networks.

Inside the Transaction Nodes: A Regulated Digital Ecosystem

When orchestrating cross-border currency transfers, institutions leverage the UDPN to move tokenized value into a smart contract. This contract subsequently releases the target currency, integrating decentralized finance (DeFi) capabilities within a permissioned network. Notably, this occurs without reliance on a central organization to dictate formats, as is the case with SWIFT messages.

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Steffen Schacher, UDPN lead at GFT Group, highlights the expansive nature of the UDPN, with roughly 25 organizations and ten proof-of-concept tests running concurrently. The participants span across continents, from the U.S. to Europe, Latin America, and Australia, showcasing the network’s global appeal.

The transaction nodes of the UDPN play a pivotal role, linking to various currency systems and pools. Each currency operates within its own transaction, paving the way for an array of entities, from central banks managing CBDCs to financial institutions and other organizations dealing with digital currencies, to operate within a regulated framework.

Connect with Collin Brown on X (Twitter) for valuable market insights, frequent updates, and a touch of humor!
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Collin Brown
Collin Brown
Collin is a Bitcoin investor of the early hour and a long-time trader in the crypto and forex market. He's fascinated by the complex possibilities of blockchain technology and tries to make matter accessible to everyone. His reports focus on developments about the technology for different cryptocurrencies.
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