Parfin, a financial technology company, has created a new blockchain system to be used as a privacy solution for the Brazilian CBDC, drex. Rayls, the new blockchain, will offer the possibility of operating in a permissioned way and also linking itself to other public blockchains using Rayls Public Chain, a native Ethereum layer two (L2).
Parfin Creates Rayls to Enhance 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 enhance the privacy of the Brazilian central bank digital currency (CBDC), drex.
The solution can be operated in a permissioned way, where every account interacting with the system needs to pass 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 states that this duality might ease the integration of regulated entities like banks and other institutions of the traditional financial world with the new decentralized finance world.
This new setup substitutes Parchain, Parfin’s earlier blockchain, which was created as a tool for tokenization of regulated institutions.
Alex Buelau, co-founder of Parfin, stated 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 innovation happens according to Buelau.
However, if this barrier falls, combining traditional digital and blockchain-based financial solutions might be possible. Rayls will be tested in combination with Microsoft ZKP Nova, another solution, to be part of the privacy net securing the information of Brazilians transacting using drex. Nonetheless, Buelau thinks that only the permissioned part of Rayls will be used during this pilot.
In May, the Central Bank of Brazil postponed drex’s pilot to 2025 due to the inefficiency of the privacy solutions proposed by third parties. The bank stated that these privacy proposals did not have the “necessary maturity to guarantee compliance with all requirements and legal issues related to the preservation of citizens’ privacy.”