Key Takeaways:
- Brazil’s Central Bank plans to launch International Pix to connect its 175M users globally.
- Pix’s 200B reduced fee transactions threaten giants like Visa and Mastercard, per the USTR.
- Colombian President Gustavo Petro wants Colombia to adopt Pix next.
Central Bank of Brazil Plans Internationalization of Pix Payment System
The Central Bank of Brazil has revealed its next steps to keep improving and growing Pix, the ubiquitous instant payment system used by almost all adults in the country.
According to local media, the Central Bank plans to launch International Pix, a standard feature that would allow individuals and companies to complete cross-border payments and remittances using the Pix network.
While Pix is already available internationally in Argentina, the U.S., and Portugal, this new initiative would make it permanent, interconnecting instant national payment systems and streamlining settlements. Pix already serves over 175 million users in Brazil and has intermediated nearly 200 billion transactions since its launch in November 2020.
The move of taking Pix’s functionality to other countries might bring unintended consequences to Brazil, as a report recently released by the Office of the United States Trade Representative (USTR) claims that Pix puts private payment alternative rails at a disadvantage, as it offers zero fees and instant finality, leaving international giants like Mastercard and Visa in the dust.
Nonetheless, President Luiz Inácio Lula da Silva has made the defense of Pix a flag of his campaign to be re-elected in the upcoming elections, claiming that Pix belongs to Brazil and that no one will change it due to the service it provides to the Brazilian people.
Internationalizing Pix might set a precedent for other countries, which could also develop their own settlement systems without using current international standards and hurting the U.S. dollar hegemony.
Colombian President Gustavo Petro supported Pix’s internationalization, proposing Colombia as the next destination for this initiative. Criticizing the actions of the Office of Foreign Assets Control (OFAC), he declared:
“I ask Brazil to extend the PIX system to Colombia—and hopefully, to stop obeying the OFAC list, which is no longer useful.”