Introducing the Universal Digital Payments Network for seamless connectivity
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Nearly two years into its development, the UDPN is the most advanced digital currency payments project in the world, which is designed to connect each of the emerging new digital currencies as they begin to be developed prior to being launched all around the globe.
A vital differentiating factor of the UDPN is that its governance and management is decentralised.
This approach is fundamentally different from the ‘hub and spoke’ approach of the major incumbent international payment networks of today, or of other digital currency payment initiatives being developed.
The project has achieved several significant milestones to date, including the launch of a UDPN Sandbox in July 2022. The first two POCs will involve two global banks testing UDPN’s digital currency cross-border transfer and swap transaction capabilities, and also how the critical “Travel Rule” can be easily implemented on the UDPN between two financial institutions for anonymous stablecoin transfers.
Solving the integration challenge
Following the launch, a number of global Tier 1 banks and corporations will continue to participate in a series of use case poofs of concept (POCs) that will demonstrate how the new network will solve the current and future challenges of integrating digital currencies into daily business, banking and payment scenarios.
In a world increasingly powered by technology, we are seeing a major transition in the way that central banks, financial institutions and end users perform financial transactions. The advent of SWIFT in the early 1970s enabled and facilitated a significant rise in cross-border, bank-to-bank financial transactions, which now run into trillions of dollars every day.
Though revolutionary at the time, this cross-border payment setup is not suitable for the rapid changes arising from the evolution of the finance industry. Innovations in fintech, digital currencies and decentralised finance demand a new standard for transactions and payments, which is faster, safer and easier to programme.
The UDPN – leading payments transformation
The continued transformation of the payments industry presents businesses with new opportunities to assist their customers in their payment processes using a broad range of innovative technologies, such as DLT, providing payment efficiencies at low cost. Regulated financial services institutions and fintechs have the opportunity to play a vital role in the future of digital currencies, from facilitating the distribution of CBDCs to reducing settlement risks.
The UDPN’s ethos centres around collaboration and its objective of improved inclusivity underpins its design for the infrastructure of the future. The next focus for the UDPN will be testing the network’s full capabilities, proving the robustness and security of the systems. The UDPN’s influence and impact on promoting decentralised finance and the digital economy will continue to grow as more regulated digital currencies are added and additional ‘alliance’ members join.
Well done to all those at GFT for spearheading this exciting and innovative venture which could prove to be a transformational moment in financial history!
