A collaborative blockchain pilot between Brazil and Hong Kong has successfully demonstrated a new model for simplifying cross-border trade finance, utilizing Chainlink’s interoperability infrastructure.
The test connected Brazil’s Drex digital currency network with Hong Kong’s Ensemble platform. This allowed for the simulated settlement of export operations between the two regions.
The initiative was a joint effort involving Brazil’s Central Bank, the Hong Kong Monetary Authority (HKMA), and Brazil-based digital bank Banco Inter. Standard Chartered Bank also participated, providing expertise in international financial operations.
Participants in the experiment stated that distributed ledger technology (DLT) can significantly reduce costs and risks. It also aims to open international opportunities for small and medium-sized enterprises (SMEs).
The digitalization of processes could transform global trade finance, a complex sector that facilitates credit and payments between importers and exporters. Chainlink provided the essential interoperability infrastructure, linking the two distinct digital networks.
This ongoing technical relationship follows previous collaborations between Banco Inter and Chainlink in earlier phases of Brazil’s Drex program. The pilot was conducted within Phase 2 of Brazil’s Central Bank digital currency project, Drex.
Brazil’s Central Bank has accelerated the development of Drex, aiming for a synthetic digital real that combines programmability, privacy, and decentralization. The Drex project is more broadly conceived as a digital credit infrastructure rather than just a central bank digital currency (CBDC).
It seeks to expand credit access and modernize Brazil’s financial ecosystem, integrating both traditional banks and fintech platforms. This digital push in Brazil comes amid a rapid expansion of digital payments and increasing use of stablecoins.
Central Bank President Gabriel Galípolo noted in February that nearly 90% of crypto transactions in Brazil involve stablecoins. This trend has positioned Brazil as fifth globally in cryptocurrency adoption, according to Chainalysis data, driven by widespread retail services and decentralized finance (DeFi).
The success of this pilot with Hong Kong could pave the way for a future global interconnection of digital currencies. Such an outcome promises faster, more secure, and more transparent cross-border transactions worldwide. Brazil aims to reinforce its role as a regional leader in adopting blockchain-based financial technology through such international collaborations.