Brazil advances CBDC technology with new cross-chain pilot using Chainlink’s CCIP Brazil advances CBDC technology with new cross-chain pilot using Chainlink’s CCIP
The CBDC pilot aims to automate cross-border commodity settlements through Chainlink's CCIP.
2 min read
Updated: Nov. 19, 2024 at 11:11 pm UTC
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The Central Bank of Brazil (BCB) is advancing its central bank digital currency (CBDC) framework initiative by collaborating with Banco Inter, Microsoft Brazil, 7COMm, and Chainlink, according to a Nov. 19 statement.
The partnership aims to support trade finance solutions in the second phase of Brazil’s DREX pilot program. This phase will focus on automating cross-border settlements for commodity transactions using blockchain technology and oracles.
Chainlink’s role
The test leverages Chainlink’s Cross-Chain Interoperability Protocol (CCIP) to enable seamless interactions between Brazil’s DREX platform and foreign central banks.
The initiative will tokenize an Electronic Bill of Lading (eBOL) and integrate supply chain data to automate payments. This data-driven approach will ensure that exporters are paid at various stages of the shipping process.
The pilot intends to showcase how blockchain-based trade finance enables Delivery versus Payment (DvP) and Payment versus Payment (PvP). These mechanisms aim to improve efficiency, security, and transparency in the global supply chain, particularly agricultural commodities.
Banco Inter is leading the implementation of the DREX platform in Brazil, while Microsoft Brazil and 7COMm will provide cloud services and technical support. Chainlink’s CCIP infrastructure will facilitate cross-chain transfers for DREX and other CBDCs.
Improving market access
Bruno Grossi, head of emerging technologies at Banco Inter, highlighted the project’s potential to expand market access and strengthen Brazil’s economic landscape.
Similarly, Microsoft Brazil said its role in DREX is to broaden access to intelligent financial services and play a key role in the development of the nation’s economy.
Meanwhile, Angela Walker, the Global Head of Banking and Capital Markets at Chainlink Labs noted that the pilot would transform trade finance by showcasing how tokenized assets can unlock new CBDC applications in Brazil.
She added:
“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.”
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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