• 23 July, 2024
News

WEF Launches Universal Digital Payments Network for CBDCs

The World Economic Forum (WEF) has announced the launch of a Universal Digital Payments Network (UDPN) for stablecoins and Central Bank Digital Currencies (CBDCs). The UDPN network, launched at Davos 2023, is poised to enable interoperability among the various digital currencies. Since the last two years, UDPN has been developing with inputs from GFT, Red Date Technology, TOKO, and DLA Piper.

The UDPN is a global messaging network supporting government-regulated digital currency systems, including regulated stablecoins and Central Bank Digital Currencies (CBDCs).

The UDPN promotes financial inclusion by allowing enterprises around the world to connect directly with the centralised and decentralised digital currency systems of the future.

The UDPN can act as a distribution network to consolidate digital currencies for enterprise IT systems, regardless of their sizes. The network would facilitate currency transfer and swaps. The UDPN is a permissioned and decentralised governance model with 8 to 24 alliance members.

Marika Lulay, CEO, GFT, 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

A sandbox for various banks to test stablecoin transfer and FX transactions started in July 2022 to launch the UDPN. The network launch saw the panel at Davos discussing digital currency, interoperability, and infrastructure. Deutsche Bank, HSBC, Standard Chartered, The Bank of East Asia, and Akbank formed the Davos panel discussing CBDCs.

As per the UDPN report, various Tier 1 banks shall join to brainstorm proof-of-concept use cases in near future. They would focus on exploring the UDPN as a solution to solve complexities in integrating digital currency with business, banking, and payments.

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