Continuing the second phase of piloting its central bank digital currency (CBDC), Drex, the Central Bank of Brazil (BCB) has selected Brazilian digital bank Banco Inter, Microsoft Brazil, blockchain platform Chainlink, and 7COMm, a decentralised finance-focused firm, to build a trade finance solution.
The Central Bank of Brazil is aiming to demonstrate the automated settlement of agricultural commodity transactions across borders, across platforms, and via different currencies. By leveraging blockchain technology, the new solution will look to automate supply chain management and improve trade finance processes.
To enable this, Chainlink will use its Cross-Chain Interoperability Protocol (CCIP) to enable interoperability between Drex and foreign central banks, ensuring that transactions are compatible and settled efficiently.
Chainlink CCIP will offer valuable infrastructure for Drex, as well as other CBDCs and tokenised assets by enhancing liquidity through smooth token transfers across various blockchain networks. It says this approach can help expand market reach, enabling enterprises to access a wider blockchain ecosystem, while also streamlining the integration of blockchain technology with existing backend systems.
Angela Walker, global head of banking and capital markets at Chainlink Labs, said: “Chainlink CCIP is essential to enabling secure cross-border, cross-currency, and cross-chain transactions and will help showcase what tokenised assets can do at scale for this key CBDC use case in Brazil.”
Meanwhile, Banco Inter will lead implementation efforts on the Drex platform in Brazil. “Banco Inter sees phase two of the DREX CBDC project as an exciting moment for Brazil,” explained Bruno Grossi, head of emerging technologies at Banco Inter. “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.”
Solving ‘real, everyday business problems’
Microsoft, an active early participant in DREX, is providing cloud services for the project. “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,” added João Aragão, innovation specialist for financial services at Microsoft.
7COMm will support the technical implementation delivery. “The advent of CBDCs, the development of blockchain interoperability protocols such as CCIP, and the use of CBDCs for cross-border payments enable a new generation of blockchain trade finance solutions,” concluded Sergio Yamani, chief innovation and new business development officer at 7COMm. “We are confident that we will deliver a solution with a well-designed and thoughtful value proposition that solves real, everyday business problems.”