Chainlink Partners with Microsoft and Banco Inter for Brazil's DREX CBDC Pilot, Utilizing Cross-Chain Interoperability Protocol

Chainlink (LINK) is diving into a new project for Brazil’s upcoming central bank digital currency (CBDC) called DREX. They’re teaming up with Microsoft and several local companies.

In a recent press release, Chainlink announced their collaboration with Microsoft Brazil, digital bank Banco Inter, and blockchain finance firm 7COMm. Together, they’re working on a trade finance solution as part of the second phase of the DREX pilot.

The main goal? To show how agricultural commodity transactions can be settled automatically across borders, platforms, and different currencies.

To achieve this, Chainlink will use its Cross-Chain Interoperability Protocol (CCIP). This technology will help connect Brazil’s Central Bank with foreign banks using DREX, ensuring smooth and efficient transaction settlements.

Another exciting aspect of the pilot is the tokenization of an Electronic Bill of Lading (eBoL). This is essentially a receipt for cargo used by shippers and carriers. By putting it on-chain, they can use supply chain data to trigger payments to exporters.

Angela Walker, who leads banking and capital markets at Chainlink Labs, expressed enthusiasm about the collaboration. She said, “We look forward to working with the Central Bank of Brazil, Banco Inter, and Microsoft to demonstrate how blockchain technology and Chainlink’s CCIP can transform trade finance.”

She emphasized that CCIP is crucial for enabling secure cross-border, cross-currency, and cross-chain transactions. It will showcase what tokenized assets can achieve on a large scale for this important CBDC use case in Brazil.

Recently, Chainlink’s CCIP technology was also utilized by Swiss crypto firm Taurus during a proof-of-concept run with asset management giant State Street to tokenize funds.

Sergey Nazarov, the creator of Chainlink, made an interesting prediction. He believes that CCIP will help real-world assets (RWAs) surpass the value of all other sectors in crypto. This could become the main way for traditional finance to bring trillions of dollars into the blockchain space.

Nazarov noted, “This is the world we should all be preparing for. The Chainlink ecosystem is working towards enabling DeFi to grow and be secure. We want to meet the reliability and guarantees that both the DeFi and traditional finance communities need.”

He concluded by saying that if all goes well, CCIP could become one of the key protocols of the Internet. This would be known as the Internet of contracts and the Internet of value. CCIP essentially serves as the transport mechanism for data and value across various chains.