Brazil’s central bank unveils phase 2 of its CBDC pilot

The Central Bank of Brazil has launched the second phase of its central bank digital currency project DREX, which aims to showcase trade finance as a new use case.

Brazil’s central bank announced in a press release on November 19 that it has selected Chainlink (LINK), Banco Inter, Microsoft and 7COMm to participate in the 2nd phase of the pilot for the digital currency project.

The solution leverages blockchain technology and oracle networks to automate supply chain management and improve trade finance processes.

At this stage, the startup will use Chainlink’s cross-chain interoperability protocol to facilitate interoperable transactions between the pilot and a foreign central bank, focusing on compatibility and efficient settlement of transactions.

“Chainlink CCIP is essential to enable secure cross-border, cross-currency and cross-chain transactions and will help demonstrate what tokenized assets can do at scale for this important CBDC use case in Brazil.”

Angela Walker, head of global banking and capital markets at Chainlink Labs

DREX Phase 2 will start in the coming weeks

According to BCB, the pilot will involve partners collaborating to tokenize an on-chain Electronic Bill of Lading that will trigger payments to exporters using supply chain data.

Targeting the entire shipping process, Drex aims to demonstrate the benefits of blockchain-based trade finance. According to the announcement, this includes seeking to unlock DvP and PvP securities exchange processes.

The key will also be supply chain efficiency, security and transparency in global trade of agricultural commodities. BCB said infrastructure development work for the second phase of the pilot will begin in the coming weeks.

Microsoft is the cloud services provider for the pilot project, while 7COMm offers technical support.

Meanwhile, Chainlink’s infrastructure continues to be adopted in a variety of applications and programs, including asset tokenization. Partners using its services include Swift, Fidelity International, ANZ and UBS.