- In the second stage, it will employ blockchain and oracles to create a trade financing solution.
- Microsoft, Banco Inter, Chainlink, and 7Comm have joined the initiative.
To enhance supply chain procedures and cross-border agricultural commodity transactions, the second phase of the Drex central bank digital currency (CBDC) pilot was established by Brazil’s central bank, Banco Central do Brasil (BCB).
Moreover, in the second stage, it will employ blockchain and oracles to create a trade financing solution. Also, Microsoft, Banco Inter, Chainlink, and 7Comm have come together to investigate the possibility of automated trade settlements.
To allow a blockchain-based delivery-versus-payment (DvP) mechanism that improves efficiency and transparency, and to support safe cross-platform transactions, Chainlink, a decentralized oracle provider, will provide its Cross-Chain Interoperability Protocol (CCIP).
Automating Payments in Supply Chain
In order to foster financial innovation and eliminate inefficiencies in trade finance, the pilot aims to incorporate blockchain technology and CBDCs into Brazil’s economy.
Furthermore, to tackle inefficiencies in global trade finance, the Drex phase two trial will use blockchain technology. The project will use blockchain mechanisms like DvP and PvP, as well as the tokenization of electronic bills of lading (eBOL). In DvP, asset transfers don’t happen until payment confirmation is received. However in PvP, several currencies may be settled at once.
The goal of testing these technologies is to automate payments in the supply chain. And make them more compatible with different platforms and currencies. The Brazilian digital bank Banco Inter will spearhead the rollout of the Drex platform throughout the nation. The bank sees the project as a chance to increase economic growth and market penetration.
Banco Inter’s head of innovative technologies, Bruno Grossi, said in a press release that the firm saw phase two as a promising time for Brazil.
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