Deutsche Bank and Standard Chartered recently collaborated on a significant exchange of dollars for euros using stablecoins and blockchain technology. This departure from the trend of decentralization highlights a more centralized approach. While decentralized exchanges like Uniswap have made currency swaps user-friendly and accessible, banks engaging in swaps operate within their own infrastructure, even when utilizing blockchain technology. In this case, SC Ventures and Deutsche Bank executed a stablecoin swap using USDC and EURS, both running on the Ethereum blockchain. They utilized the Universal Digital Payment Network (UDPN) as their platform. The UDPN is a decentralized messaging backbone designed to ensure interoperability among stablecoins and central bank digital currencies (CBDCs). It connects different blockchains, both public and private, and integrates them with commercial IT systems. While the UDPN requires registration and references regulatory requirements, it aims to funnel activity back into traditional channels governed by institutional entities. This experiment serves as the first of 12 proof-of-concept trials to evaluate the UDPN’s integration into banking operations. The UDPN represents a shift in traditional financial institutions’ approach, as they seek to replicate the decentralized ethos. While it may offer benefits for banks, decentralized tools from the ecosystem, such as cross-chain aggregators and open protocols, may prove more effective due to their openness and interoperability. The UDPN also allows banks to emulate centralization.

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Information	Details
Geography	Europe
Countries	🇩🇪 🇨🇭
Sentiment	neutral
Relevance Score	1
People	None
Companies	Deutsche Bank, Standard Chartered, Universal Digital Payment Network (UDPN), SC Ventures
Currencies	USDC, STASIS EURO, US Dollar, Euro
Securities	None