Deutsche Bank, SC Ventures Trial SWIFT Messaging Layer For Stablecoins And CBDCs

Author: Khyathi Dalal | October 26, 2023 05:36pm

Deutsche Bank (NYSE:DB) and Standard Chartered’s (OTC:SCBFF) SC Ventures have undertaken a testing system enabling blockchain-based transactions, stablecoins, and CBDCs to interact with one another just like the SWIFT messaging layer in legacy banking infrastructure.

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The test system, according to Coindesk, was created by tech consultancy GFT Group and Red Date Technology, co-founder of the Chinese Blockchain-Based Service Network.

Test cases include transferring and swapping USDC stablecoins on the Universal Digital Payments Network (UDPN), financial institutions, and consultancies. UDPN is a permissioned blockchain system consisting of validator nodes run by an alliance of banks.

UDPN consists of almost 25 organizations including banks from the U.S., Australia, Latin America, and Europe — running around 10 proof-of-concept tests in parallel, UDPN Lead at GFT Group Steffen Schacher commented.

UDPN acts as an interoperability bridge between all blockchain networks. It also applies battle-tested decentralized digital identity standards (DIDs) to participants, creating a bank-friendly and regulated environment.

For a cross-border currency transfer, the sending institution takes the tokenized value and transfers it into a UDPN-managed smart contract, leading to the release of the intended target currency from that smart contract, SC Ventures CTO Thorsten Neumann explained.

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Posted In: DB SCBFF