TLDR:
Brazil’s Central Bank (BCB) launched phase two of DREX CBDC pilot program
Partnership includes Microsoft Brazil, Banco Inter, 7COMm, and Chainlink
Project focuses on automating cross-border commodity settlements using blockchain
Chainlink’s CCIP will enable cross-chain interactions between DREX and foreign CBDCs
Pilot includes tokenization of Electronic Bill of Lading (eBOL) for trade finance
The 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 for international trade and payments.
BCB’s latest initiative 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 incorporating blockchain technology and digital payment systems.
Chainlink’s Cross-Chain Interoperability Protocol (CCIP) plays a central role in the project. The protocol will enable DREX to interact seamlessly with digital currencies from other central banks, creating a bridge for international financial transactions.
One key innovation in this phase is the tokenization of Electronic Bills of Lading (eBOL). This digital transformation of traditional shipping documents will work alongside supply chain data to automate payment processes. The system is designed to ensure exporters receive payments at various points throughout 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, leads the implementation of the DREX platform. Bruno Grossi, head of emerging technologies at Banco Inter, views the project as an opportunity to expand market access and strengthen Brazil’s economic position.
Microsoft Brazil’s involvement centers on providing cloud services essential for the project’s operation. The technology company has expressed its commitment to expanding access to intelligent financial services and supporting Brazil’s economic development.
The technical aspects of blockchain integration will be handled by 7COMm, ensuring the system meets all necessary requirements for secure and efficient operation.
Angela Walker, Global Head of Banking and Capital Markets at Chainlink Labs, emphasized how the pilot could transform trade finance. She highlighted CCIP’s role in enabling secure cross-border and cross-currency transactions.
The timeline for phase two extends into 2025, allowing for thorough testing 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 for incorporating tokenization into traditional banking operations.
The Central Bank of Brazil continues to monitor and evaluate the progress of the DREX pilot, ensuring it meets all regulatory requirements while advancing the country’s financial infrastructure.
This phase of testing focuses on practical applications, moving beyond theoretical frameworks to implement real-world solutions for international trade and finance.
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