XRP and Stellar Outlook as Standard Chartered Pushes Innovation

• Standard Chartered and Deutsche Bank just concluded a PoC for CBDC and stablecoin interoperability.
• The potential impact on XRP and XLM remains a consideration for proponents.

Two top banks, Standard Chartered and Deutsche Bank have successfully concluded the trial of stablecoin payments with real use cases. The development was announced on Monday by SC Ventures, the development arm of banking giant Standard Chartered. Markedly, the Proof-of-concept (PoC) for the trial was executed using the Universal Digital Payments Network (UDPN) blockchain. 

The UDPN Stablecoin Trial

The PoC is designed to create a bridge between payments across several Central Bank Digital Currencies (CBDCs) and blockchain networks via messages like the SWIFT network. However, the exchange of messages between the participating institutions was through a permissioned blockchain that will infuse messages with the transaction functionality on the blockchain to enable asset transfers, unlike SWIFT. 

Over time, traditional financial institutions have displayed a high level of skepticism towards the adoption and integration of cryptocurrencies but this time around, they are showing optimism. Banks are ready to participate as a result of the presence of regulated tokens. Also, they are comfortable with the amount of eminence given to compliance through the use of decentralized identities.

Gradually, it is becoming apparent that stablecoins are one of the leading applications of blockchain technology. Plus the fact that the asset class has a combined market capitalization of over $100 billion. The move made by Standard Chartered and Deutsche Bank suggests that both financial giants have taken cognizance of the numerous opportunities and potential embedded in stablecoins, and are ready to harness them by adopting the technology. 

Founded by Red Date Technology, UDPN was built to tackle the adoption barriers encountered by current digital currency offerings. So far, the nascent crypto ecosystem has seen a reasonable rise in the number of CBDCs, stablecoins, and bank-issued deposit tokens. In the presence of this surge, the industry has become burdened with interoperability problems.

The use of UDPN, unlike public blockchains, is to facilitate the exchange of CBDCs and regulated stablecoins with the practical aim of improving interoperability. Synthetic versions of Circle’s dollar-pegged stablecoin USDC and EURS (Stasis Euro stablecoin) were utilized for the recently concluded and successful pilot trial.

XRP and XLM, Under Threat? 

The successful implementation of this offering may likely pose significant competition or even a threat to leading digital networks like XRP, which is associated with Ripple Labs, and Stellar (XLM). On their own, XRP and XLM are two networks that are recognized for their respective capacity to facilitate fast and cheap cross-border transactions. 

On the other hand, XRP and XLM may be integrated into the new offering to enhance its functionalities similar to the recent development of Visa. In the first half of this year, Novatti Group Limited also revealed plans to extend the use of the AUDD stablecoin to the XRP ledger. 

Overall, this ends up as a win-win situation for all involved entities. With their inherent value proposition, XRP and XLM are not currently under threat and are billed to deepen their innovation over time.

Crypto News Flash does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. Readers should do their own research before taking any actions related to cryptocurrencies. Crypto News Flash is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned.