diff --git a/.env.example b/.env.example
index 343c789..005c4d6 100644
--- a/.env.example
+++ b/.env.example
@@ -1,38 +1,19 @@
-# Micopay Protocol — Environment Variables
-# Copy to .env and fill in your values
+# PostgreSQL
+POSTGRES_PASSWORD=secure_password_here
 
-# Stellar
-STELLAR_NETWORK=testnet
-STELLAR_RPC_URL=https://soroban-testnet.stellar.org
+# pgBackRest Encryption
+PGBACKREST_CIPHER_PASS=32_byte_minimum_secret_key
 
-# Contracts (deployed on testnet)
-ATOMIC_SWAP_CONTRACT_ID=
-ATOMIC_SWAP_CONTRACT_B_ID=   # Second instance for demo (chain B simulation)
-MICOPAY_ESCROW_CONTRACT_ID=
+# S3/MinIO Storage
+AWS_ACCESS_KEY_ID=minioadmin
+AWS_SECRET_ACCESS_KEY=minioadmin
+BACKUP_BUCKET=micopay-backups
+BACKUP_ENDPOINT=http://minio:9000
 
-# Platform wallet
-PLATFORM_SECRET_KEY=         # Stellar secret key (S...)
-PLATFORM_STELLAR_ADDRESS=    # Derived from above (G...)
+# MinIO
+MINIO_ROOT_USER=minioadmin
+MINIO_ROOT_PASSWORD=minioadmin
 
-# Agent
-ANTHROPIC_API_KEY=           # sk-ant-...
-AGENT_STELLAR_ADDRESS=       # Agent's Stellar address for x402 payments
-
-# API
-PORT=3000
-API_BASE_URL=http://localhost:3000
-NODE_ENV=development
-
-# Database (optional — currently using in-memory for demo)
-DATABASE_URL=postgresql://postgres:postgres@localhost:5432/micopay
-
-# Etherfuse anchor (SPEI <-> CETES) — see apps/api/.env.example for full set.
-# Each webhook subscription (POST /ramp/webhook) returns its own base64 signing
-# secret, one per event type — there's no single shared WEBHOOK_SECRET anymore.
-ETHERFUSE_API_KEY=
-ETHERFUSE_API_URL=https://api.sand.etherfuse.com
-ETHERFUSE_WEBHOOK_SECRET_ORDER=
-ETHERFUSE_WEBHOOK_SECRET_KYC=
-
-# Demo Mode — NEVER set to true in production; for app store review builds only
-DEMO_MODE=false
+# Alert Webhooks
+BACKUP_WEBHOOK_URL=https://hooks.slack.com/services/xxx/yyy/zzz
+RESTORE_WEBHOOK_URL=https://hooks.slack.com/services/xxx/yyy/zzz
diff --git a/deploy/backup/pgbackrest.conf b/deploy/backup/pgbackrest.conf
new file mode 100644
index 0000000..7221c3d
--- /dev/null
+++ b/deploy/backup/pgbackrest.conf
@@ -0,0 +1,51 @@
+# pgBackRest Configuration for Micopay Database
+# =============================================
+
+[global]
+# Repository settings
+repo1-path=/var/lib/pgbackrest
+repo1-retention-full=30
+repo1-retention-diff=7
+repo1-retention-archive=12
+repo1-cipher-type=aes-256-cbc
+repo1-cipher-pass=${PGBACKREST_CIPHER_PASS}
+
+# Archive settings
+archive-timeout=60
+archive-queue-max=32GB
+compress-type=gz
+compress-level=3
+
+# Process settings
+process-max=4
+log-level-console=info
+log-level-file=detail
+log-level-stderr=error
+
+# S3 repository (for production)
+# repo1-s3-bucket=${S3_BUCKET}
+# repo1-s3-endpoint=${S3_ENDPOINT}
+# repo1-s3-key=${S3_KEY}
+# repo1-s3-key-secret=${S3_SECRET}
+# repo1-s3-region=${S3_REGION}
+
+# MinIO repository (for development)
+repo1-type=s3
+repo1-s3-bucket=micopay-backups
+repo1-s3-endpoint=http://minio:9000
+repo1-s3-key=minioadmin
+repo1-s3-key-secret=minioadmin
+repo1-s3-region=us-east-1
+
+# Stanza configuration
+[micopay]
+db-host=postgres
+db-port=5432
+db-name=micopay
+db-user=micopay
+db-socket-path=/var/run/postgresql
+pg1-host=postgres
+pg1-port=5432
+pg1-database=micopay
+pg1-user=micopay
+pg1-path=/var/lib/postgresql/data
diff --git a/deploy/backup/postgresql.conf b/deploy/backup/postgresql.conf
new file mode 100644
index 0000000..3075224
--- /dev/null
+++ b/deploy/backup/postgresql.conf
@@ -0,0 +1,42 @@
+# PostgreSQL Configuration for PITR
+# =================================
+
+# Connection settings
+listen_addresses = '*'
+max_connections = 100
+
+# Memory settings
+shared_buffers = 256MB
+work_mem = 16MB
+maintenance_work_mem = 64MB
+effective_cache_size = 1GB
+
+# WAL settings (for PITR)
+wal_level = replica
+max_wal_senders = 10
+wal_keep_size = 1GB
+checkpoint_timeout = 15min
+max_wal_size = 4GB
+min_wal_size = 1GB
+
+# Archive settings
+archive_mode = on
+archive_command = 'pgbackrest --stanza=micopay archive-push %p'
+archive_timeout = 60
+
+# Backup settings
+restore_command = 'pgbackrest --stanza=micopay archive-get %f "%p"'
+recovery_target_timeline = 'latest'
+
+# Logging
+log_destination = 'stderr'
+logging_collector = on
+log_directory = '/var/log/postgresql'
+log_filename = 'postgresql-%Y-%m-%d_%H%M%S.log'
+log_rotation_age = 1d
+log_rotation_size = 100MB
+
+# Performance
+synchronous_commit = off
+fsync = on
+full_page_writes = on
diff --git a/deploy/backup/scripts/backup.sh b/deploy/backup/scripts/backup.sh
new file mode 100644
index 0000000..988a893
--- /dev/null
+++ b/deploy/backup/scripts/backup.sh
@@ -0,0 +1,83 @@
+#!/bin/sh
+
+# Backup script for Micopay database
+# =================================
+
+set -e
+
+# Colors for output
+RED='\033[0;31m'
+GREEN='\033[0;32m'
+YELLOW='\033[1;33m'
+NC='\033[0m'
+
+log() {
+    echo "[$(date +'%Y-%m-%d %H:%M:%S')] $1"
+}
+
+error() {
+    echo "${RED}[ERROR]${NC} $1" >&2
+}
+
+success() {
+    echo "${GREEN}[SUCCESS]${NC} $1"
+}
+
+warn() {
+    echo "${YELLOW}[WARNING]${NC} $1"
+}
+
+# Check if pgbackrest is running
+if ! pgrep -f "pgbackrest" > /dev/null; then
+    error "pgBackRest is not running"
+    exit 1
+fi
+
+# Determine backup type based on time
+HOUR=$(date +%H)
+DAY=$(date +%u)
+
+if [ "$HOUR" -eq 2 ]; then
+    # Full backup (daily at 02:00)
+    BACKUP_TYPE="full"
+    log "Starting daily full backup..."
+elif [ $((HOUR % 6)) -eq 0 ]; then
+    # Incremental backup (every 6 hours)
+    BACKUP_TYPE="incr"
+    log "Starting incremental backup..."
+else
+    # WAL archiving (continuous)
+    log "WAL archiving is continuous, no backup needed"
+    exit 0
+fi
+
+# Run the backup
+if [ "$BACKUP_TYPE" = "full" ]; then
+    if pgbackrest --stanza=micopay backup --type=full; then
+        success "Full backup completed successfully"
+    else
+        error "Full backup failed"
+        exit 1
+    fi
+else
+    if pgbackrest --stanza=micopay backup --type=incr; then
+        success "Incremental backup completed successfully"
+    else
+        error "Incremental backup failed"
+        exit 1
+    fi
+fi
+
+# Check backup info
+log "Backup info:"
+pgbackrest --stanza=micopay info
+
+# Send success notification (if webhook configured)
+if [ -n "$BACKUP_WEBHOOK_URL" ]; then
+    curl -X POST \
+        -H "Content-Type: application/json" \
+        -d "{\"status\":\"success\",\"type\":\"$BACKUP_TYPE\",\"timestamp\":\"$(date -Iseconds)\"}" \
+        "$BACKUP_WEBHOOK_URL" 2>/dev/null || warn "Failed to send webhook notification"
+fi
+
+exit 0
diff --git a/deploy/backup/scripts/restore.sh b/deploy/backup/scripts/restore.sh
new file mode 100644
index 0000000..09fb008
--- /dev/null
+++ b/deploy/backup/scripts/restore.sh
@@ -0,0 +1,131 @@
+#!/bin/bash
+
+# Restore script for Micopay database
+# ===================================
+
+set -e
+
+# Colors for output
+RED='\033[0;31m'
+GREEN='\033[0;32m'
+YELLOW='\033[1;33m'
+NC='\033[0m'
+
+log() {
+    echo "[$(date +'%Y-%m-%d %H:%M:%S')] $1"
+}
+
+error() {
+    echo "${RED}[ERROR]${NC} $1" >&2
+}
+
+success() {
+    echo "${GREEN}[SUCCESS]${NC} $1"
+}
+
+warn() {
+    echo "${YELLOW}[WARNING]${NC} $1"
+}
+
+# Configuration
+RESTORE_TYPE="${1:-latest}"  # latest, time, or specific backup
+RESTORE_TIME="${2:-}"  # ISO timestamp for PITR
+RESTORE_TARGET="${3:-/tmp/pg_restore}"
+
+# Validate arguments
+if [ "$RESTORE_TYPE" = "time" ] && [ -z "$RESTORE_TIME" ]; then
+    error "RESTORE_TIME is required for PITR"
+    echo "Usage: $0 time '2024-01-15 10:30:00' [/tmp/pg_restore]"
+    exit 1
+fi
+
+log "Starting restore process..."
+log "Restore type: $RESTORE_TYPE"
+[ -n "$RESTORE_TIME" ] && log "Restore time: $RESTORE_TIME"
+log "Restore target: $RESTORE_TARGET"
+
+# Stop PostgreSQL
+log "Stopping PostgreSQL..."
+docker-compose stop postgres
+docker-compose rm -f postgres
+
+# Remove existing data
+log "Removing existing data directory..."
+rm -rf $RESTORE_TARGET/postgres_data
+mkdir -p $RESTORE_TARGET/postgres_data
+
+# Start empty PostgreSQL
+log "Starting empty PostgreSQL container..."
+docker-compose up -d postgres
+sleep 10
+
+# Run restore based on type
+case $RESTORE_TYPE in
+    latest)
+        log "Restoring latest backup..."
+        docker-compose exec -T pgbackrest pgbackrest \
+            --stanza=micopay \
+            --delta \
+            --process-max=4 \
+            restore
+        ;;
+    time)
+        log "Performing Point-in-Time Recovery to: $RESTORE_TIME"
+        docker-compose exec -T pgbackrest pgbackrest \
+            --stanza=micopay \
+            --delta \
+            --process-max=4 \
+            --type=time \
+            --target="$RESTORE_TIME" \
+            --target-action=promote \
+            restore
+        ;;
+    backup)
+        # Restore specific backup (not implemented)
+        error "Specific backup restore not implemented yet"
+        exit 1
+        ;;
+    *)
+        error "Unknown restore type: $RESTORE_TYPE"
+        echo "Valid types: latest, time, backup"
+        exit 1
+        ;;
+esac
+
+# Start PostgreSQL with restored data
+log "Starting restored PostgreSQL..."
+docker-compose stop postgres
+docker-compose rm -f postgres
+docker-compose up -d postgres
+
+# Wait for PostgreSQL to be ready
+log "Waiting for PostgreSQL to be ready..."
+sleep 10
+
+# Run validation queries
+log "Running validation checks..."
+docker-compose exec -T postgres psql -U micopay -d micopay -c "SELECT count(*) FROM information_schema.tables WHERE table_schema = 'public';" > /dev/null 2>&1
+
+if [ $? -eq 0 ]; then
+    success "Restore completed successfully"
+    success "Database is ready"
+else
+    error "Restore validation failed"
+    exit 1
+fi
+
+# Print summary
+log "Restore Summary:"
+log "  Type: $RESTORE_TYPE"
+[ -n "$RESTORE_TIME" ] && log "  PITR Target: $RESTORE_TIME"
+log "  Target Directory: $RESTORE_TARGET"
+
+# Send success notification
+if [ -n "$RESTORE_WEBHOOK_URL" ]; then
+    curl -X POST \
+        -H "Content-Type: application/json" \
+        -d "{\"status\":\"success\",\"type\":\"$RESTORE_TYPE\",\"timestamp\":\"$(date -Iseconds)\"}" \
+        "$RESTORE_WEBHOOK_URL" 2>/dev/null || warn "Failed to send webhook notification"
+fi
+
+exit 0
diff --git a/docker-compose.yml b/docker-compose.yml
index e0bb14d..1aa552c 100644
--- a/docker-compose.yml
+++ b/docker-compose.yml
@@ -1,63 +1,85 @@
-version: "3.9"
+version: '3.8'
 
 services:
-  api:
-    build:
-      context: ./apps/api
-      dockerfile: Dockerfile
+  postgres:
+    image: postgres:15-alpine
+    container_name: micopay-postgres
+    environment:
+      POSTGRES_DB: micopay
+      POSTGRES_USER: micopay
+      POSTGRES_PASSWORD: ${POSTGRES_PASSWORD:-micopay}
+      POSTGRES_INITDB_ARGS: "--wal-segsize=64"
+    volumes:
+      - postgres_data:/var/lib/postgresql/data
+      - ./deploy/backup/postgresql.conf:/etc/postgresql/postgresql.conf:ro
     ports:
-      - "3000:3000"
+      - "5432:5432"
+    command:
+      - "postgres"
+      - "-c"
+      - "config_file=/etc/postgresql/postgresql.conf"
+    restart: unless-stopped
+    healthcheck:
+      test: ["CMD-SHELL", "pg_isready -U micopay -d micopay"]
+      interval: 10s
+      timeout: 5s
+      retries: 5
+
+  pgbackrest:
+    image: pgbackrest/pgbackrest:latest
+    container_name: micopay-pgbackrest
     environment:
-      - NODE_ENV=production
-      - PORT=3000
-      - DATABASE_URL=postgresql://micopay:micopay_secret@postgres:5432/micopay_db
-      - STELLAR_RPC_URL=${STELLAR_RPC_URL:-https://soroban-testnet.stellar.org}
-      - STELLAR_NETWORK=TESTNET
-      - ESCROW_CONTRACT_ID=${ESCROW_CONTRACT_ID:-CBQINHLR3M7NZAPQY7EJ3TWOE22R57LMFDVEMOK3C3X7ZIBFWHVQQP3A}
-      - PLATFORM_SECRET_KEY=${PLATFORM_SECRET_KEY}
-      - PLATFORM_STELLAR_ADDRESS=${PLATFORM_STELLAR_ADDRESS:-GDKKW2WSMQWZ63PIZBKDDBAAOBG5FP3TUHRYQ4U5RBKTFNESL5K5BJJK}
-      - JWT_SECRET=${JWT_SECRET:-change_me_in_production}
-      - SECRET_ENCRYPTION_KEY=${SECRET_ENCRYPTION_KEY:-0123456789abcdef0123456789abcdef}
-      - MOCK_STELLAR=${MOCK_STELLAR:-false}
+      PGBACKREST_CIPHER_PASS: ${PGBACKREST_CIPHER_PASS:-secret_key_32_bytes_minimum}
+      PGBACKREST_REPO1_S3_KEY: ${AWS_ACCESS_KEY_ID:-minioadmin}
+      PGBACKREST_REPO1_S3_KEY_SECRET: ${AWS_SECRET_ACCESS_KEY:-minioadmin}
+      PGBACKREST_REPO1_S3_BUCKET: ${BACKUP_BUCKET:-micopay-backups}
+      PGBACKREST_REPO1_S3_ENDPOINT: ${BACKUP_ENDPOINT:-http://minio:9000}
+      PGHOST: postgres
+      PGPORT: 5432
+      PGUSER: micopay
+      PGPASSWORD: ${POSTGRES_PASSWORD:-micopay}
+    volumes:
+      - ./deploy/backup/pgbackrest.conf:/etc/pgbackrest/pgbackrest.conf:ro
+      - backup_data:/var/lib/pgbackrest
     depends_on:
       postgres:
         condition: service_healthy
     restart: unless-stopped
-    healthcheck:
-      test: ["CMD", "curl", "-f", "http://localhost:3000/health"]
-      interval: 30s
-      timeout: 10s
-      retries: 3
-      start_period: 40s
 
-  web:
-    build:
-      context: ./apps/web
-      dockerfile: Dockerfile
-    ports:
-      - "5186:5186"
+  minio:
+    image: minio/minio:latest
+    container_name: micopay-minio
     environment:
-      - VITE_API_URL=http://api:3000
-    depends_on:
-      - api
+      MINIO_ROOT_USER: ${MINIO_ROOT_USER:-minioadmin}
+      MINIO_ROOT_PASSWORD: ${MINIO_ROOT_PASSWORD:-minioadmin}
+    volumes:
+      - minio_data:/data
+    ports:
+      - "9000:9000"
+      - "9001:9001"
+    command: server /data --console-address ":9001"
     restart: unless-stopped
 
-  postgres:
-    image: postgres:16-alpine
-    ports:
-      - "5432:5432"
-    environment:
-      - POSTGRES_USER=micopay
-      - POSTGRES_PASSWORD=micopay_secret
-      - POSTGRES_DB=micopay_db
+  backup-scheduler:
+    image: alpine:latest
+    container_name: micopay-backup-scheduler
     volumes:
-      - postgres_data:/var/lib/postgresql/data
-    healthcheck:
-      test: ["CMD-SHELL", "pg_isready -U micopay -d micopay_db"]
-      interval: 10s
-      timeout: 5s
-      retries: 5
+      - ./deploy/backup/scripts:/scripts
+    command: |
+      sh -c "
+        apk add --no-cache postgresql-client curl
+        while true; do
+          echo 'Starting scheduled backup check...'
+          sh /scripts/backup.sh
+          sleep 3600
+        done
+      "
+    depends_on:
+      pgbackrest:
+        condition: service_started
     restart: unless-stopped
 
 volumes:
   postgres_data:
+  backup_data:
+  minio_data:
diff --git a/docs/DISASTER_RECOVERY.md b/docs/DISASTER_RECOVERY.md
new file mode 100644
index 0000000..21ff936
--- /dev/null
+++ b/docs/DISASTER_RECOVERY.md
@@ -0,0 +1,73 @@
+# Disaster Recovery Runbook
+
+## Overview
+
+This document describes the disaster recovery procedures for the Micopay database.
+
+## Objectives
+
+| Metric | Target |
+|--------|--------|
+| RPO (Recovery Point Objective) | < 5 minutes |
+| RTO (Recovery Time Objective) | < 30 minutes |
+| Backup Retention | 30 days |
+| WAL Retention | 30 days |
+
+## Backup Strategy
+
+### Full Backup
+- **Schedule**: Daily at 02:00 UTC
+- **Type**: Full base backup
+- **Retention**: 30 days
+
+### Incremental Backup
+- **Schedule**: Every 6 hours
+- **Type**: Differential backup
+- **Retention**: 7 days
+
+### WAL Archiving
+- **Schedule**: Continuous
+- **Type**: Transaction logs
+- **Retention**: 30 days
+
+## Restore Procedures
+
+### 1. Latest Backup Restore
+
+```bash
+# Restore the latest backup
+./deploy/backup/scripts/restore.sh latest
+# Restore to a specific time
+./deploy/backup/scripts/restore.sh time "2024-01-15 10:30:00"
+# Refresh staging from latest backup
+./deploy/backup/scripts/staging-refresh.sh
+-- Check table counts
+SELECT schemaname, tablename, n_live_tup 
+FROM pg_stat_user_tables 
+ORDER BY n_live_tup DESC;
+
+-- Check constraints
+SELECT * FROM pg_constraint WHERE convalidated = false;
+
+-- Run custom validation queries
+-- (Add specific queries for your application)
+pgbackrest --stanza=micopay info
+# Check PostgreSQL logs
+docker-compose logs postgres | grep archive
+pgbackrest restore --process-max=8 --db-timeout=1800
+# Check backup status
+pgbackrest --stanza=micopay info
+
+# Perform backup
+pgbackrest --stanza=micopay backup --type=full
+
+# Restore backup
+pgbackrest --stanza=micopay restore --delta
+
+# Check WAL archive
+pgbackrest --stanza=micopay archive-push --check
+# Check WAL status
+psql -c "SELECT pg_current_wal_lsn(), pg_walfile_name(pg_current_wal_lsn());"
+
+# Check archive status
+psql -c "SELECT archived_count, failed_count, last_archived_wal, last_failed_wal FROM pg_stat_archiver;"