Parfin, a financial technology firm, has introduced Rayls, a novel blockchain platform aimed at improving the privacy features of Brazil’s central bank digital currency (CBDC) named drex. Rayls stands out by operating in a permissioned manner while also establishing connections with public blockchains via Rayls Public Chain, which is an Ethereum Layer 2 (L2) solution. This innovative approach has the potential to bridge the gap between traditional finance systems and decentralized finance (DeFi).
Rayls ensures that all accounts within its system undergo Know Your Customer (KYC) procedures, enhancing the security and compliance levels significantly. Additionally, the Rayls Public Chain component allows for seamless interaction with various open cryptocurrency projects, offering flexibility and integration capabilities. Consequently, this setup could facilitate the involvement of regulated institutions, such as banks and financial entities, in the DeFi sector.
Parfin’s co-founder, Alex Buelau, emphasized the existing divide between traditional finance and DeFi, particularly concerning the use of public blockchains. Currently, drex operates on Hyperledger Besu, a permissioned blockchain system, which isolates it from public chains like Solana and Ethereum where most innovation occurs. Nonetheless, Buelau is optimistic that Rayls could eliminate this barrier, enabling the convergence of traditional digital finance and blockchain-based financial solutions.
Rayls is poised to replace Parfin’s previous blockchain platform, Parchain, which was developed for the tokenization of regulated institutions. The integration of Rayls with Microsoft ZKP Nova, another privacy solution, is expected to further heighten the security of transactions conducted using drex. While Buelau anticipates that only the permissioned segment of Rayls will be utilized in the initial pilot, this collaboration signifies a significant advancement towards more robust privacy protocols.
The Central Bank of Brazil recently postponed the drex pilot to 2025 due to the inadequacy of privacy solutions proposed by external parties. These solutions were deemed lacking in maturity to address all necessary requirements and legal concerns regarding citizen privacy. However, with the introduction of Rayls, these deficiencies may be addressed, presenting a stronger and more mature privacy solution. The successful implementation of Rayls could potentially accelerate the pilot and subsequent launch of drex, marking a crucial milestone in Brazil’s financial sector.
Parfin’s innovative strategy with Rayls underscores a commitment to bridging the gap between traditional finance systems and DeFi. This initiative not only enhances drex’s privacy features but also encourages greater integration and collaboration within the financial industry.
