The Central Bank of Brazil (BCB) has taken a significant step in the second phase of its digital currency pilot, DREX, by partnering with Banco Inter, Microsoft Brazil, 7COMm, and Chainlink Labs.
Brazil’s pioneers blockchain trade finance
This ambitious initiative aims to transform trade finance by leveraging blockchain technology, interoperability protocols, and automation to streamline cross-border agricultural commodity transactions.
Trade Finance with Blockchain
The pilot project focuses on using blockchain to tokenize an Electronic Bill of Lading (eBoL) and automate the settlement of transactions.
By incorporating real-time supply chain data, the system can trigger payments throughout the shipping process.
This approach not only facilitates Payment versus Payment (PvP) and Delivery versus Payment (DvP) mechanisms but also ensures heightened efficiency, security, and transparency in international trade.
One of the key enablers of the project is Chainlink’s Cross-Chain Interoperability Protocol (CCIP), which allows seamless connectivity between DREX and foreign central banks’ digital currency platforms.
This interoperability ensures that cross-border, cross-currency transactions are executed efficiently and securely, showcasing the transformative potential of blockchain technology in global finance.
Collaboration for Innovation
Banco Inter is leading the implementation efforts in Brazil.
Bruno Grossi, Head of Emerging Technologies at Banco Inter, is convinced of the importance of the collaboration.
“This is an exciting moment for Brazil. Partnering with Microsoft and Chainlink Labs provides a transformative opportunity to expand market reach and improve the health of the Brazilian economy,” he said
Microsoft is contributing its cloud services and blockchain expertise to support the development of the DREX platform. 7COMm, a digital transformation specialist, is providing technical support for the initiative.
This pilot positions Brazil as a trailblazer in blockchain-based trade finance, aligning with global efforts like the G20 roadmap to improve international payments.
By integrating cutting-edge technologies, the DREX project is set to redefine cross-border trade, bolster economic integration, and establish a robust foundation for tokenized assets in the global economy.
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