Chainlink Labs, a blockchain oracle service provider, has joined forces with Microsoft Brazil and other industry players to work on the second phase of Brazil's central bank digital currency (CBDC) initiative, DREX.
Collaborative Efforts for Advanced Trade Finance
The pilot aims to leverage blockchain technology to address key challenges in decentralization, privacy, and programmability while integrating tokenization into the banking sector. The collaboration includes Microsoft Brazil, Banco Inter, and blockchain firm 7COMm to create a trade finance solution as part of DREX's pilot. Chainlink will utilize its Cross-Chain Interoperability Protocol (CCIP) to facilitate secure, cross-border, cross-currency, and cross-chain transactions.
Angela Walker, Global Head of Banking and Capital Markets at Chainlink Labs, stated:
“Chainlink CCIP is essential to enabling secure cross-border, cross-currency, and cross-chain transactions and will help showcase what tokenized assets can do at scale for this key CBDC use case in Brazil.”
Tokenization and Digital Asset Innovation
A critical aspect of the second phase of the pilot includes the tokenization of an Electronic Bill of Lading (eBoL). This blockchain-based solution will automate payments for exporters by using on-chain supply chain data. Additionally, the initiative aims to unlock new efficiencies in the global supply chain through Delivery versus Payment (DvP) and Payment versus Payment (PvP) mechanisms, ensuring transparency and security in international agricultural commodity trade.
Strategic Role of Banco Inter and Microsoft
Banco Inter, a digital bank in Brazil, will oversee the implementation of the DREX platform in the country, viewing the initiative as a significant opportunity to enhance market access and economic resilience.
Bruno Grossi, Head of Emerging Technologies at Banco Inter, remarked:
“We see collaborating in this project with technology leaders like Microsoft and Chainlink Labs as a transformative opportunity to expand market reach and improve the health of the Brazilian market.”
Meanwhile, Microsoft is contributing its cloud services and blockchain expertise to the project. João Aragão, Innovation Specialist for Financial Services at Microsoft, highlighted the company’s commitment:
“Microsoft is providing technology to support the development of DREX that has been designed to not only broaden access to intelligent financial services but to play a key role in the development of the nation's economy.”
Aiming for Transformation in Trade Finance
The second phase of the DREX pilot is scheduled to continue through 2025, with a focus on exploring digital asset transactions, such as liquidity pools for government bonds and cross-border trade settlements. This pilot seeks to demonstrate how blockchain technology can reshape trade finance, ensuring efficiency and scalability in Brazil’s economic landscape.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
