CBDCs are in the news these days. Every nation out there and the network of banks around the world are testing the CBDCs. And they are doing the interbanking tests of the stablecoins too.
This is done so that the banks can do the transactions without any form of fee, test the tokenization and also settle the internal banking drafts easily.
So there are number of the chains out there that would be helping in this but the public network chains are in the works these days.
UDPN is one of the popular chain being used by the banks and also being used for the development of the stablecoins and the tokens. So Deutsche banks and the Standard Chartered bank are the two among them who made use of the stablecoin test recently. This was more or less the proof of concept which they made use of for the stablecoin.And we would be seeing more test before the final public release of those stablecoin.
So today I want to cover the UDPN chain and the stablecoin proof of concept tests that are being tested by the Deutsche Bank and Standard Chartered bank. These two banks have formed a union for variety of the blockchain tests that you can see through these days. Currently a lot of blockchains are in use by the CBDCs some of them are local to those nations which some are forked off the open source chains.
Here we are going to take a look at some of the UDPN chain's use case scenario for these banks. Let's see how this whole sccenario worked around banks and their pilot test.
Image Credit: Cryptonaute
Standard Chartered & Deutsche Bank Pilot Test
Banks around the world are teaming up for the stablecoin tests and the interbanking connections. In case of the Standard Chartered and the Deutsche bank they made a tech arm among themselves named SC Ventures. Which is what used the blockchain called the UDPN network.This chain was used to deploy the tested coin. And this coin would be used for the sake of the interbanking payments. In near future it may even go for the national CBDC or may remain the inter banking token. This is a pilot test and it was done to show that if everything works as per the pilot tests, more tests and changes would follow soon.
This test among the banks was for pure proof of concept. This was done in the approach of the banks making the most transactions without having to rely on the other nations and the banks. This is one of the reasons interbanking tokens, public chains, ledger servics are being tested. And the UDPN is one of those blockchain services that are being used by these two banks and services like this would be extended into other banks too. Which would collectively make more accessible on the public chains.
What is Universal Digital Payments Network (UDPN)?
Think of UDPN as a sandbox where banks and the govt test the stablecoins and the CBDCs. These sandbox play the series of the tests which would make sure that the standards that are put forth by the govt stablecoins and the coins are followed. And this way the messaging network across variety of the banks are easily being tested.You can also learn about failure, pending and the issues that may arise with the blockchain network. In that case it's reasonable to say that this sandbox tests slowly build the stablecoins for the real world tests.
This message network also make sure to work with the FIAT and also be used for the digital asset transfer and the purchase. The bank based stablecoin is the prime use case in our context for these two banks. But overall I'd say that there is a travel rule that such sandbox based networks try out and use it for test. So that the final release of such token and the public chain would be easier to see through deployment when the public releases are out. You may also find the KYC, tokenization and the ecom usage of the UDPN in action too.
Stablecoin Proof of concept (PoC) of Banks
What the Standard Chartered and the Deutsche bank has done here is the proof of concept. This will lead to the pushing of variety of the CBDCs on their chain. Which is somethign many banks are planning internally. More of such chains like say onyx and the UDPN chains that are connecting multiple CBDCs are being added into the chain there. Like say proof of concept on one chain then using the same on another chain and then reconnecting multiple chains for the sake of the stablecoins and the digital assets. That is what is the in future cards there.
It'd be interesting once the banks start the funds and the tokenization. You can see that there are types where the banks want to work with govt and then there are types which banks are connecting other banks across chains and the nation too. So this is just a proof of concept for now. And we are going to see some really strong use case when the stablecoins are being pushed into the action through multi bank pilots. UDPN is a good test sandbox to see all of these questions getting answered one after another. Which is what most of the EU banks are going to focus on in upcoming future.
Deutsche Bank and Standard Chartered has been into blockchain investment for last few years. And we are going to be seeing the other banks in the motion towards the stableconis and token assets being pushed into the govt level blockchain projects. If all these things play out as these banks and govt CBDCs want, then we would be moving towards the cashless society and the more secure future where people would be living fear free of trying to defend their cash at home or outside. Which in a way goes to show stablecoins have a good future.