TSL Express Daily News

The second phase of the pilot will demonstrate a new set of use cases, such as trade finance; infrastructure development is set to begin in the coming weeks

SAN FRANCISCO, Nov. 19, 2024 /PRNewswire/ -- The Central Bank of Brazil (BCB) has selected Banco Inter alongside Microsoft Brazil, 7COMm and Chainlink to build a trade finance solution as part of the second phase of Brazil's DREX, Brazilian digital currency's pilot. The solution leverages blockchain technology and oracles to automate supply chain management and improve trade finance processes. The goal of the pilot is to demonstrate the automated settlement of agricultural commodity transactions across borders, across platforms, and via different currencies.

As part of this initiative, Chainlink's Cross-Chain Interoperability Protocol (CCIP) will enable interoperability between the Drex of Brazil Central Bank and a foreign central bank, ensuring that transactions are compatible and settled efficiently. The pilot will involve tokenizing an Electronic Bill of Lading (eBoL) on-chain and using supply chain data to trigger payments to exporters throughout the shipping process. The solution will demonstrate how blockchain-based trade finance unlocks Delivery versus Payment (DvP) and Payment versus Payment (PvP), ensuring greater efficiency in the global supply chain, as well as security and transparency around the international trade of agricultural commodities. 

Chainlink CCIP is positioned to offer valuable infrastructure for DREX, as well as other central bank digital currencies (CBDC) and tokenized assets by enhancing liquidity through smooth token transfers across various blockchain networks. This approach can help expand market reach by allowing enterprises to access a wider blockchain ecosystem, while also streamlining the integration of blockchain technology with existing backend systems.

Banco Inter will lead implementation efforts on the DREX platform in Brazil solely. "Banco Inter sees Phase 2 of the DREX CBDC project as an exciting moment for Brazil," said 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."

"We look forward to working with the Central Bank of Brazil, Banco Inter, and Microsoft to demonstrate how the adoption of blockchain technology combined with Chainlink's interoperability protocol CCIP can transform trade finance," stated Angela Walker, Global Head of Banking and Capital Markets at Chainlink Labs. "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."

Microsoft, a long-term proponent of blockchain innovation and an active early participant in DREX, is providing cloud services for the project. "Microsoft is pleased to be working with the Central Bank of Brazil, Banco Inter, 7COMm and Chainlink Labs on Brazil's DREX digital currency," said João Aragão, innovation specialist for financial services at Microsoft. "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."

7COMm, a solutions provider focused on digital transformation, will support the technical implementation delivery. "We are excited to work with the Central Bank of Brazil, Banco Inter, Microsoft, and Chainlink on this trade finance use case, which has the potential to boost the country's economy," said Sergio Yamani, Chief Innovation and New Business Development Officer at 7COMm. "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. We are confident that we will deliver a solution with a well-designed and thoughtful value proposition that solves real, everyday business problems."

About Chainlink
Chainlink Labs is the primary contributing developer of Chainlink, the leading technology platform for onchain data, cross-chain interoperability, and blockchain abstraction. Chainlink has securely enabled over $16 trillion in transaction value and delivered more than 15 billion onchain data points across the blockchain ecosystem. The Chainlink platform enables financial institutions to develop customized, compliant, and future-proof blockchain applications and tokenized assets. Major market infrastructure providers and institutional banks such as Swift, ANZ, Fidelity International, and many others have collaborated with Chainlink to successfully demonstrate how financial institutions can use existing infrastructure and messaging standards to interact with tokenized assets across any blockchain.