- Brazil’s central bank has launched the second phase of its Drex CBDC pilot to improve cross-border agricultural trade and streamline supply chain operations.
- Chainlink is providing its Cross-Chain Interoperability Protocol (CCIP) for secure, cross-platform transactions, while Banco Inter is leading the platform’s implementation and Microsoft offers the cloud infrastructure.
- The pilot aims to modernise trade finance by addressing inefficiencies, automating supply chain payments, and exploring the integration of CBDCs and blockchain technology into Brazil’s economy.
Brazil’s central bank, Banco Central do Brasil (BCB), has entered the second phase of its Drex central bank digital currency (CBDC) pilot, which aims to enhance cross-border agricultural trade and streamline supply chain operations through blockchain technology and trade finance solutions.
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What If…
Phase two of the pilot brings together key industry players, including Microsoft, Chainlink, Banco Inter, and 7Comm, to develop a trade finance system powered by blockchain and oracles.
A central feature of this initiative is the use of Chainlink’s Cross-Chain Interoperability Protocol (CCIP), an open-source engine that interconnects isolated systems to allow for cross-chain asset interoperability, enabling secure, automated cross-platform transactions.
The pilot will employ delivery-versus-payment (DvP) mechanisms, which ensure asset transfers occur only upon payment confirmation, boosting transparency and efficiency.
Banco Inter, a prominent Brazilian digital bank, is leading the implementation of the Drex platform. Bruno Grossi, the bank’s head of emerging technologies, described the pilot as a “transformative opportunity”:
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.
Bruno Grossi, Head of Emerging Technologies at Banco InterMeanwhile, Microsoft is providing the cloud infrastructure essential for the pilot’s technical needs, while 7Comm offers expertise in blockchain integration.
CBDCs and Tokenisation
The project also incorporates the tokenisation of electronic bills of lading (eBOL) and simultaneous settlement systems like payment-versus-payment (PvP) for multi-currency transactions. These features are expected to solve inefficiencies in global trade finance and automate supply chain payments, paving the way for broader CBDC integration into Brazil’s economy.
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CBDCs are a controversial topic in crypto, but banks, governments and multinationals haven’t stopped researching and developing them. A few months ago, Visa introduced the Visa Tokenized Asset Platform (VTAP), which allowed the firm to benefit institutional clients in interbank transfers in markets with wholesale CBDCs and cross-border transfers for multinational corporations.
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