Brazilian digital bank Banco Inter has completed a blockchain-based international trade finance pilot with Chainlink, the Central Bank of Brazil and the Hong Kong Monetary Authority (HKMA), demonstrating how distributed ledger technology can simplify cross-border settlements.
The experiment took place under Phase 2 of Brazil’s Drax Central Bank Digital Currency (CBDC) project and simulated the settlement of export transactions between Brazil’s Drax network and Hong Kong’s Ensemble platform, a blockchain system developed under the HKMA’s Project Ensemble initiative.
Chainlink provided interoperability infrastructure connecting the two networks banco inter,
Banco Inter has previously worked with Chainlink, including on the Phase 2 pilot of Brazil’s Drex digital currency project.
“By supporting token payments and automated title transfers via smart contracts, the platform lowers costs, mitigates risks and opens up international market opportunities for small and medium-sized businesses,” Banco Inter said, according to a translated version of the announcement.
The system of trade finance, credit and payment arrangements that enables importers and exporters to conduct international trade remains one of the more complex areas of global commerce. The pilot suggests that such processes could be automated through blockchain technology to synchronize goods movement, payments and title transfer.
Financial institution Standard Chartered also participated in the pilot.
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Brazil’s digital reality takes shape
Brazil’s central bank has accelerated its digital currency pilot over the past year as it works to develop a synthetic digital real that combines programmability, privacy and decentralization.
The initiative comes amid Brazil’s rapid shift towards digital payments and growing adoption of stablecoins. Gabriel Gallipolo, president of the Central Bank of Brazil, said at a conference in February that about 90% of crypto transactions in the country involve stablecoins.
Although Drax is commonly known as a central bank digital currency, according to Reuters, Gallipol described it as an infrastructure project designed to expand credit access and modernize Brazil’s financial system.
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