Brazil to launch new payment system in response to cryptocurrencies

The Banco Central do Brasil (BCB), the central bank of Brazil, has announced the launch of PIX —its answer to the crypto revolution.

The BCB said that it is taking the first steps to make instant payments available to the population. The Brazilian Instant Payment Scheme or PIX is "the single brand for the instant payment functionality launched today by BCB," the central bank said in a press release dated Feb. 20.

As per the details, it is mandatory for all financial institutions and payment institutions licensed by the BCB, with more than 500,000 active customer accounts to participate in PIX. These institutions must provide their customers with all the functionalities for initiating and receiving instant payments.

"PIX will be beneficial to end-users (payers and payees) given the 24/7/365 availability and immediate transfer of funds," the BCB said.

"As for convenience, PIX will make it faster and easier to carry out transactions, which will be performed with a QR Code or by entering simple information such as cell phone number, email or taxpayer identification (technically called a key, nickname or proxy identifier). The gain in flexibility for citizens, companies and governments will foster financial services providers to compete more effectively by delivering products, services and experiences that are more convenient for their customers."

Slated to launch in November 2020, the system will reduce the costs of fiat transfers between individuals and businesses, CoinDesk reported citing local outlet Livecoins.

Central Bank of Brazil President Roberto Campos Neto spoke about PIX at the launch event for the planned system. According to him, PIX is developed as a response to the new digital payment systems like cryptocurrencies.

“PIX came from a need for people to have a payment instrument that is both cheap, fast, transparent and secure,” said Campos Neto. “If we think about what has happened in terms of the creation of bitcoins, cryptocurrencies, and other encrypted assets, it comes from the need to have an instrument with such characteristics.”

Meanwhile, the Bank of Korea is developing a blockchain-based bond management system to leverage the technology for the entire process from bond issuance to settlement. It is currently looking for a blockchain services provider.

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