Chainlink Will Work Alongside Microsoft To Launch Brazilian CBDC

Blockchain oracle service provider Chainlink (LINK) is reportedly collaborating with Microsoft, digital bank Banco Inter, and blockchain finance firm 7COMm on a pilot project for a Brazilian central bank digital currency (CBDC), known as DREX.

The pilot will also focus on tokenizing Electronic Bills of Lading (eBoL), documents used by shippers and carriers for cargo receipts, by placing them on-chain. This will trigger payments to exporters using supply chain data.

Revolutionizing Traditional Finance

Chainlink announced that the team is working together to develop a trade finance solution for DREX. The overall goal is to showcase the automated settlement of agricultural commodity transactions across borders, platforms, and various currencies.

The service provider will therefore leverage its Cross-Chain Interoperability Protocol (CCIP) to ensure smooth transaction settlements by enabling interoperability between the Brazil Central Bank and foreign banks utilizing DREX. CCIP was also recently employed by Swiss crypto firm Taurus in a proof-of-concept with asset management giant State Street to tokenize funds. 

Angela Walker, Global Head of Banking and Capital Markets at Chainlink Labs, stated that the team is ecstatic to collaborate with the Central Bank of Brazil, Banco Inter, and Microsoft to demonstrate how blockchain adoption, combined with the CCIP protocol, can revolutionize traditional finance. CCIP is critical for facilitating secure cross-border, cross-currency, and cross-chain transactions, and this project will show the potential of tokenized assets for the Brazilian CBDC, she added.

Nazarov Chimes In

Sergey Nazarov, the man who created Chainlink, has predicted that CCIP could help real-world assets (RWAs) surpass the value of other sectors in crypto, ultimately serving as a crucial mechanism for bringing trillions of dollars via traditional finance into the blockchain industry.

Nazarov believes the ecosystem Chainlink is building is focused on enabling DeFi to grow securely while ensuring reliability while simultaneously utilizing the value of TradFi. If successful, CCIP could become a foundational protocol for the Internet of Contracts and the Internet of Value, allowing data and value to flow seamlessly across different blockchains, he added.