TLDR:
- The Brazilian Central Bank (BCB) is launching phase two of the DREX CBDC pilot program
- Partnership includes Microsoft Brazil, Banco Inter, 7COMm, and Chainlink
- The project focuses on the automation of cross-border commodity settlements using blockchain
- Chainlink’s CCIP allows cross-chain interactions between DREX and foreign CBDCs
- Pilot includes tokenization of Electronic Bill of Lading (eBOL) for trade finance
Central Bank of Brazil (BCB) has launched the second phase of its Central Bank Digital Currency (CBDC) pilot program, known as DREX. The project now includes partnerships with major technology companies and financial institutions to test new methods of international trade and payments.
The latest initiative of the BCB brings together Microsoft Brazil, Banco Inter, 7COMm, and blockchain technology provider Chainlink. The collaboration marks a new stage in Brazil’s development of its digital currency, focusing on trade finance solutions and cross-border settlements.
The second phase of the DREX pilot specifically targets the automation of international commodity transactions. This development aims to streamline the process of cross-border trade by integrating blockchain technology into digital payment systems.
Chainlink’s Cross-Chain Interoperability Protocol (CCIP) plays a central role in the project. The protocol allows DREX to seamlessly interact with digital currencies of other central banks, creating a bridge for international financial transactions.
A key innovation in this phase is the tokenization of Electronic Bills of Lading (eBOL). This digital transformation of traditional shipping documents works alongside supply chain data to automate payment processes. The system is designed to ensure that exporters receive payments at various points during the shipping process.
The pilot program introduces two important mechanisms: delivery versus payment (DvP) and payment versus payment (PvP). These systems aim to make global supply chain operations more efficient and transparent, with a particular focus on agricultural commodities.
Banco Inter, a Brazilian digital bank, is leading the implementation of the DREX platform. Bruno Grossi, Head of Emerging Technologies at Banco Inter, sees the project as an opportunity to expand market access and strengthen Brazil’s economic position.
Microsoft Brazil’s involvement centers on the provision of cloud services essential for the operation of the project. The technology company expressed its commitment to expand access to smart financial services and support the economic development of Brazil.
The technical aspects of blockchain integration are handled by 7COMm, so that the system meets all the necessary requirements for safe and efficient operation.
Angela Walker, Global Head of Banking and Capital Markets at Chainlink Labs, highlighted how the pilot could transform trade finance. She highlighted CCIP’s role in enabling secure cross-border and currency transactions.
The timeline for phase two extends into 2025, allowing for a thorough test of digital asset transactions. The program includes plans to explore liquidity pools for government bonds and international trade operations.
The project represents part of a broader trend in Brazil’s financial sector. Other companies, such as Ripple, have recently announced partnerships with Brazilian exchanges to expand cross-border payment options.
The DREX pilot aims to address technical challenges including decentralization, privacy and programmability. These elements are crucial to integrate tokenization into traditional banking operations.
The Central Bank of Brazil continues to monitor and evaluate the progress of the DREX pilot, ensuring that it meets all regulatory requirements while advancing the country’s financial infrastructure.
This phase of the test focuses on practical applications, moving beyond theoretical frameworks to implement real-world solutions for international trade and finance.
