Stablecoins and Central Bank Digital Currencies (CBDCs) are the talk of the town, and a day doesn’t go past where a country doesn’t mention one or the other. Hong Kong-based Red Date Technology announced at Davos World Economic Forum (WEF) that it’s launched its latest project that allows stablecoins and CDBCs to be used in cross-border payments by mainstream banks, rather than just cryptocurrency exchanges and enthusiasts.
Known as Universal Digital Payments Network (UDPN), the platform will make sure that all transactions between various currencies are interoperable. This will allow companies in different countries to transact and settle in various stablecoins and CBDCs without fuss. Red Date didn’t explicitly say who is part of the test, but Deutsche Bank, HSBC, Standard Chartered, and Bank of East Asia joined Red Date in a discussion at the UDPN event.
Ripple Already Testing the Water
Ripple launched its RippleNet several years back as a case study into how global banks can use blockchain and distributed ledger technology (DLT) to settle cross-border payments. More than 100 financial institutions across the globe are signed up to RippleNet, taking full use of its range of features, such as xCurrent, xRapid, and xVia, all combining together to allow banks to provide faster and cheaper settlements for their customers. There’s a good chance that you’ve used it without even knowing!
What Does This Mean for Bitcoin?
Many people are wondering how this development will impact Bitcoin. For now, Red Date Technology is only working with a small handful of banks and stablecoins/CBDCs. This means that Bitcoin won’t run on UDPN for now, or the foreseeable future. The biggest competitor that UDPN will face is SWIFT, as this is the technology that it’s directly looking to replace. As more CBDCs come into circulation, you’ll likely be using UDPN without even knowing it, just like you could have used RippleNet. Cryptocurrency isn’t Bitcoin, and developments in the world won’t harm Bitcoin, only spread the adoption of blockchain and DLT technology.
Does China Want to Ban Bitcoin?
China doesn’t have the best relationship with cryptocurrencies, having “banned” them several times over the years. Currently, Bitcoin and all digital currencies are seen as illegal in the country. In fact, it’s not just the currencies, but even transacting in them is also illegal. The People’s Bank of China has stated that cryptocurrencies “seriously endangers the safety of people’s assets”. Despite Bitcoin and other cryptocurrency being “illegal” in China, there are still many ways to use cryptocurrency and Bitcoin in China.
What Does the Future Hold for Bitcoin?
Red date Technology’s new UDPN system will herald a new era for digital payments between banks and other financial institutions, which will be fantastic for people that use the traditional banking system, in the long term. As for Bitcoin, this development will have minimal impact on it and its future. Eventually Bitcoin will need to be replaced due to its halving mechanic and refusal to increase block sizes, but that’s not going to be an issue during our lifetimes. So, carry on loving and enjoying Bitcoin just as you did before!
Hodl.fm over and out!
