Chainlink Joins Forces With Microsoft, Banco Inter, To Build Solution For Brazil CBDC

Decentralized blockchain oracle network, Chainlink, has joined a group of companies in developing a trade finance solution for a central bank digital currency (CBDC) created by the Central Bank of Brazil (BCB).

According to a press release by Chainlink, other companies involved in building the solution include the Brazilian arm of the technology giant Microsoft, the digital Brazilian bank Banco Inter, and the blockchain software firm 7COMm.

The BCB selected Chainlink to enable interoperability between the country’s CBDC pilot DREX and foreign central banks via the network’s Cross-Chain Interoperability Protocol (CCIP). Microsoft Brazil will provide cloud services for the project, while 7COMm will support the technical implementation delivery. Banco Inter will focus on leading the implementation of DREX in Brazil only.

Chainlink Joins Brazil’s CBDC Project

The trade finance solution these organizations are working on is part of the second phase of the DREX project. Brazil is looking to leverage blockchain technology and oracles to create an automated supply chain management system. The system will ensure that agricultural commodity transactions across borders and currencies are compatible and settled efficiently.

As part of the project, the entities involved will tokenize an Electronic Bill of Lading (eBoL) on-chain and attempt to use supply chain data to trigger payments to exporters throughout the shipping process. The goal is to automate the settlement process and improve trade finance processes.

Angela Walker, Global Head of Banking and Capital Markets at Chainlink Labs, the developer of the Chainlink network, said: “Chainlink CCIP is essential to enabling secure cross-border, cross-currency, and cross-chain transactions and will help showcase what tokenized assets can do at scale for this key CBDC use case in Brazil.”

Unlocking DvP and PvP Settlements

By the end of the pilot, the solution will demonstrate how trade finance transactions settled on the blockchain can unlock Delivery versus Payment (DvP) and Payment versus Payment (PvP) settlement processes. This approach to the global supply chain will enhance security and transparency around the international trade of commodities beyond agriculture.

“Banco Inter sees Phase 2 of the DREX CBDC project as an exciting moment for Brazil. 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,” remarked Bruno Grossi, Banco Inter’s Head of Emerging Technologies.