Microsoft Brazil, 7COMm, and Chainlink are collaborating with Banco Inter on a trade finance application as part of the second phase of the central bank’s digital currency trials, known as Drex.
Brazil’s central bank has been developing the digital real for several years, launching an initial pilot phase in 2023 to test privacy and programmability features through a specific use case. The central bank has since narrowed down proposals for the second phase from 42 to 13, utilizing the existing infrastructure to test applications created by private sector firms.
The proposal from the Chainlink consortium employs blockchain technology and oracles to enhance supply chain management and trade finance processes. The pilot aims to showcase the automated settlement of agricultural commodity transactions across borders, platforms, and currencies.
Through this initiative, Chainlink’s Cross-Chain Interoperability Protocol (CCIP) will facilitate connections between Brazil’s Central Bank Drex and a foreign central bank, ensuring that transactions are efficiently compatible and settled. The pilot will include the tokenization of an Electronic Bill of Lading (eBoL) on-chain, leveraging supply chain data to automate payments to exporters throughout the shipping process.
Bruno Grossi, head of emerging technologies at Banco Inter, commented, “Banco Inter views Phase 2 of the Drex CBDC project as an exciting moment for Brazil. Partnering with technology leaders like Microsoft and Chainlink Labs presents a transformative opportunity to expand market reach and enhance the Brazilian market’s health.”
Other participants in the second-round trials include Visa with Nubank and brokerage XP, focusing on the use of a CBDC for optimizing the foreign exchange market. Google is collaborating with financial services firms to explore credit collateralized by public securities, while Santander is conducting experiments involving transactions for vehicles.