Parfin Creates New Blockchain to Be Used as Privacy Solution for Brazilian CBDC

Parfin, a financial technology company, has developed a unique blockchain system called Rayls specifically designed to enhance the privacy of the Brazilian central bank digital currency (CBDC), drex. This new blockchain solution offers the flexibility of operating in a permissioned manner, where accounts must undergo Know Your Customer (KYC) procedures to interact with the system. However, it also incorporates Rayls Public Chain, which enables integration with other public blockchains such as Ethereum’s layer two (L2). Parfin believes that this dual functionality will facilitate the bridging of traditional financial institutions with the decentralized world of finance. Rayls replaces Parfin’s previous blockchain system, Parchain, which was designed for tokenization of regulated entities. Parfin co-founder Alex Buelau highlights the existing barrier between traditional finance and decentralized finance (DeFi) that drex addresses through its permissioned blockchain system, isolating it from public chains like Ethereum and Solana. Nevertheless, the integration of traditional and blockchain-based financial solutions could become a possibility if this barrier is eliminated. Rayls will undergo testing in conjunction with Microsoft ZKP Nova, another privacy solution, to ensure the secure and private transactions of Brazilians using drex. However, during this pilot phase, Buelau expects only the permissioned aspect of Rayls to be utilized. In May, the Central Bank of Brazil postponed drex’s pilot to 2025 as third-party privacy solutions proposed at that time did not meet the necessary requirements and legal obligations surrounding citizen privacy.