Hong Kong’s Bank of East Asia (BEA) recently conducted a Proof of Concept (PoC) issuing stablecoins using the Universal Digital Payment Network (UDPN). He tested both issuance and redemption (minting and burning) of stablecoins and tested a mobile application for clients.

Today most stablecoins are used in the cryptocurrency world or jurisdictions where users want access to dollars. One of the reasons stablecoins haven’t become mainstream is the lack of infrastructure. However, this is changing, meaning stablecoins will become increasingly competitive with bank payments, especially cross-border. Banks are not standing by. They are engaging in multi-bank tokenized deposit trials and issuing their own tokenized deposits or stablecoins.

UDPN is a multifaceted project that supports the issuance of stablecoins and tokenized deposits, as well as providing an interoperability layer between different digital currencies, including central bank digital currencies (CBDCs).

BEA’s Stephen Leung, Group CIO, General Manager and Head of the Technology and Productivity Division said, “Through our PoC with UDPN, we have developed a global approach to central bank digital currencies (CBDCs) and stablecoins. Gained insight into.”

“Along with the issuance of stablecoins, experiments were conducted on transfers and exchanges between CBDCs and stablecoins. Cross-chain interoperability between stablecoins and digital currencies on different blockchains was also examined. (a) important foundation has been laid for the opportunities of

Earlier this year the bank participated in a DLT repo transaction with HSBC involving digital green bonds issued by Hong Kong.

UDPN was founded by Reddit Technology, a co-founder of China’s Blockchain-based Service Network (BSN) and the international BSN Spartan Network. Its development partner is GFT Consultancy. Earlier this year it launched a sandbox for banks.

Hong Kong’s Digital Currency Activities

Meanwhile, the Hong Kong Monetary Authority (HKMA) is running at least three digital currency sandboxes, although this PoC was not part of them. The HKMA recently announced the expansion of its retail CBDC sandbox to include tokenized deposits. In addition, it has a sandbox for stablecoins and another for institutional use of wholesale CBDC, which is part of Project Ensemble.

If you’re interested in bank-issued stablecoins and tokenized deposits, an early access version of our report is now available.