Parfin, a financial technology company, has created a new blockchain system that can be used as a privacy solution for Brazil’s CBDC, drex. Rayls, the new blockchain, will provide the ability to operate in a permissioned manner and also link itself to other public blockchains using Rayls Public Chain, a native Ethereum layer two (L2).
Parfin creates Rayls to improve privacy for Brazilian CBDC Drex
Parfin, a crypto and blockchain-focused financial company, has announced the creation of a new platform called Rayls, which aims to improve the privacy of the Brazilian Central Bank (CBDC) digital currency, drex.
The solution can be used in an authorized manner, where every account that interacts with the system must go through Know Your Customer (KYC) procedures. However, the blockchain also includes Rayls Public Chain, which allows interaction with other open cryptocurrency projects as an Ethereum L2. Parfin argues that this duality could facilitate the integration of regulated entities such as banks and other institutions from the traditional financial world with the new decentralized financial world.
This new setup replaces Parchain, Parfin’s previous blockchain, which was created as a tool for tokenization of regulated institutions.
Alex Buelau, co-founder of Parfin, stated that there is a “barrier between the world of traditional finance and what we call DeFi, which takes place on public blockchains.” This is how drex, which uses Hyperledger Besu, a permissioned blockchain system, works, isolated from public chains like Solana, Ethereum and others where Buelau says innovation is happening.
However, if this barrier falls, combining traditional digital and blockchain-based financial solutions could be possible. Rayls will be tested in combination with Microsoft ZKP Nova, another solution, to become part of the privacy net that protects the information of Brazilians who transact with drex. However, Buelau believes that only the permitted part of Rayls will be used during this pilot.
In May, the Central Bank of Brazil postponed drex’s pilot until 2025 due to the inefficiency of privacy solutions proposed by third parties. The bank stated that these privacy proposals did not have the “necessary maturity to ensure compliance with all requirements and legal issues related to the preservation of citizens’ privacy.”