Brazil Taps Chainlink For Cross-Border CBDC Trade Finance Pilot

Brazil’s Central Bank is teaming up with Chainlink and Microsoft to expand its digital currently pilot.

On Nov. 19, the Central Bank of Brazil (BCB) announced it will carry out the second pilot of its distributed ledger technology platform (DLT), Drex, in partnership with Chainlink, Microsoft Brazil, and Banco Inter.

The companies will work with BCB to build a blockchain-based trade finance solution leveraging Chainlink oracles to automate supply chain management and financing. The pilot will carry out cross-border agricultural commodity transactions involving multiple tokenized currencies and trading platforms.

Chainlink’s Cross-Chain Interoperability Protocol (CCIP) will facilitate transactions between the BCB’s Drex platform and a foreign central bank. BCB will tokenize an Electronic Bill of Lading (eBoL) — a legal document detailing goods being transferred between a shipper and carrier — with the supply chain data triggering payments to exporters.

BCB said the pilot’s second phase aims to demonstrate how DLT can improve the efficiency and transparency of global trade. The project will take place in the coming weeks.

“The second phase of the pilot will demonstrate a new set of use cases, such as trade finance [and] infrastructure development,” Chainlink said.

Microsoft will provide cloud services for the initiative. Banco Inter, which became Brazil’s first fully digital bank in 2014, will implement the pilot on DREX, with assistance from 7COMm, a local software solutions provider.

The initiative is the latest example of Chainlink CCIP’s use in the context of DLT trials carried out by major government and financial institutions. Examples include Swift in June 2023, Australia and New Zealand Bank in March 2024, and the U.S. Depository Trust & Clearing Corporation (DTCC) in May 2024.

Chainlink completed CCIP’s permissionless rollout in April. CCIP has facilitated $307.3 million worth of transactions to date, generating nearly $1 million worth of fees for Chainlink, according to Dune.

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