Blockchain oracle service provider Chainlink (LINK) is working on a pilot project for Brazil’s proposed central bank digital currency (CBDC) called DREX with Microsoft and other firms in the country.
In a press release, Chainlink says it is collaborating with Microsoft Brazil, digital bank Banco Inter and blockchain finance firm 7COMm to build a trade finance solution as part of the second phase of the DREX pilot.
The goal of the pilot, according to the announcement, is to “demonstrate the automated settlement of agricultural commodity transactions across borders, across platforms, and via different currencies.”
Chainlink will use its Cross-Chain Interoperability Protocol (CCIP) to create interoperability between Brazil’s Central Bank and other foreign banks using DREX, ensuring efficient transaction settlements.
The pilot also aims to tokenize an Electronic Bill of Lading (eBoL) – or receipts for cargo used by shippers and carriers – and put them on-chain using supply chain data to trigger payments to exporters.
Says Angela Walker, global head of banking and capital markets at Chainlink Labs,
“We look forward to working with the Central Bank of Brazil, Banco Inter, and Microsoft to demonstrate how the adoption of blockchain technology combined with Chainlink’s interoperability protocol CCIP can transform trade finance… 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.”
Chainlink’s CCIP technology was recently used by Swiss crypto firm Taurus in its proof-of-concept run with asset management giant State Street to tokenize funds.
Chainlink creator Sergey Nazarov recently predicted that CCIP would help real-world assets (RWAs) overtake the value of all other sectors in crypto, and become the main mechanisms that allows traditional finance to bring trillions of dollars into the blockchain industry.
“So this is kind of the world that I think we should all be preparing for, and that the Chainlink ecosystem is working towards, by both enabling DeFi to grow and be secure and reach the kind of level of reliability and guarantees that the DeFi community needs and that the TradFi community needs, and enabling the TradFi community’s value to flow onto blockchains and into the DeFi ecosystem eventually.
What this will result in, if it works as intended, is CCIP (cross-chain interoperability protocol) becoming one of the key protocols of the Internet, what we call the Internet of contracts and internet of value. Because CCIP is fundamentally the data and value transport mechanism by which that data and value flows into and across all of those chains.”
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Featured Image: Shutterstock/eliahinsomnia/David Sandron
