Banks Complete First Digital Currency Transfer and Swap on UDPN

Deutsche Bank and Standard Chartered’s SC Ventures business have completed the first Universal Digital Payments Network (UDPN) proof-of-concept (PoC), by executing real-time on-chain transfer and swap test transactions between USDC and EURS stablecoins.

As part of this first PoC, SC Ventures set up a development environment and leveraged UDPN software development kits and APIs to create decentralised identities and linked digital currency wallets. Upon completing the onboarding process, SC Ventures initiated multiple transfers and swaps of synthetic USDC and EURS to digital currency wallets of Deutsche Bank.

These transactions were signed with SC Ventures’ private key, completed in real time and visible on public EtherScan (etherscan.io). In parallel, Deutsche Bank initiated multiple transfers and swaps to SC Ventures’ digital currency accounts via a graphical user interface (UI) integrated within their dedicated UDPN environment.

Both financial institutions relied on UDPN business nodes to connect to the UDPN permissioned DLT consensus network. The payment messages were executed via two transaction nodes, one supporting USDC transactions and the second transaction node supporting EURS transactions. UDPN, which was first announced in 2022 at Davos, says, “These real- time transactions demonstrate how UDPN can execute cross-border transactions in minutes instead of days, based on a highly scalable architecture and removing the challenges of interoperability between different technologies within the digital currency environment.”

It adds that what is the first in the series of 12 PoCs, the Digital Currency Transfer and Swap PoC was executed over a period of several weeks to display how UDPN solves the challenge of interoperability in cross-border payments. It also says that learnings around Central Bank Digital Currency (CBDC), digital assets, key custody, compliance, and other related subjects were discussed and documented over the course of the PoC.

“The PoC plays a vital role in shaping the success of the UDPN and fosters greater understanding and collaboration among stakeholders,” UDPN states. “The knowledge sharing and contribution from financial institutions and technology participants will contribute to ensuring seamless functionality and performance upon the commercialisation in late 2023.”

Thorsten Neumann, CTO of SC Ventures, says, “This initiative brings the industry together to identify opportunities to unlock economic value in newly emerging digital currencies. Tokenised forms of currency will inevitably become a part of the new financial landscape. Financial service providers and fintechs are well-positioned to experiment with stablecoins and CBDC use-cases that benefit from the finality of on-chain transactions.”

Meanwhile, Rafael Otero, CTO and CPO of Deutsche’s Corporate Bank division, adds, “For Deutsche Bank, the industry pilot on the UDPN platform is an opportunity to investigate and research how we can enable our clients to actively participate in the decentralised future global economy and benefit from applications that are built on top of the network. This is the next logical step in the development of financial transactions.”