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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), showing how distributed ledger technology can simplify cross-border settlement.
The experiment took place under Phase 2 of Drex’s central bank digital currency (CBDC) project and simulated the settlement of export transactions between Brazil’s Drex network and Hong Kong’s Ensemble platform, a blockchain system developed under HKMA’s Project Ensemble initiative.
Chainlink provided the interoperability infrastructure connecting the two networks, according to Bank Inter.
Banco Inter previously worked with Chainlinkincluded in a pilot before Phase 2 of Brazil’s Drex digital currency project.
“By supporting tokenized payments and automating title transfers via smart contracts, the platform reduces costs, reduces risk, and opens international market opportunities to small and medium-sized businesses,” Banco Inter said, according to a translated version of the announcement.
Trade financethe system of credit and payment agreements that allows importers and exporters to do international business, remains one of the most complex areas of global trade. The pilot suggests that such processes could be automated through blockchain technology to synchronize the movement of goods, payments and title transfers.
Financial institution Standard Chartered also participated in the pilot.
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Brazil’s digital reality is taking 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 a rapid shift towards digital payments and the growing adoption of stablecoins in Brazil. The president of the Central Bank of Brazil, Gabriel GalÃpolo, said in a conference in February about 90% of crypto transactions in the country involves stablecoins.
Although Drex is commonly referred to as a central bank digital currency, GalÃpolo described it instead as an infrastructure project designed to expand access to credit and modernize Brazil’s financial system, according to Reuters.
Related: Brazil’s stablecoin opens the door to the country’s double-digit returns
