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How did Pix become such a success? For starters, the central bank mandated participation by banks and other payment institutions with more than 500,000 transaction accounts. This created a critical mass of users and kick-started the network effects so that the open-loop payment platform could gain traction. The central bank amplified this mandate by facilitating community among the financial institutions participating in Pix. Prior to launch, they organized in-person meetings periodically to update everyone on key milestones and future plans. They solicited input to key decisions and created working groups to tackle specific issues. Secondly, Pix is available to any financial and payment institution licensed by the central bank that offers transaction accounts. Open participation was further fostered by allowing an indirect model of integration that significantly reduces the cost (eg connectivity costs associated with a direct integration). Thirdly, a consistent, simple and quick user experience was enforced by the central bank, including a flexible alias directory (based on phone numbers, email addresses or randomly generated string of characters), and standardized API and QR code technology. Finally, Pix is significantly cheaper for merchants (Pix charges 0.25% of the transaction amount versus 1-2% for credit cards and 3-4% for credit cards. Also with credit card transactions, the merchant may have to wait up to 30 days for their money.

The Bank for International Settlements (BIS) published a paper on Brazil's recent experience with the Pix retail instant payment system. Since launching in November 2020, Pix has signed up 67% of adults in Brazil, with free payments between individuals and low charges for merchants. The two key ingredients in the success of Pix are, first, the mandatory participation of large banks to kick-start network effects for users, and second, the central bank's dual role as infrastructure provider and rule setter. Pix has also shown how central bank infrastructures can support interoperability and competition, promoting lower costs and greater financial inclusion. These features also have relevance for the possible adoption of retail CBDC.

The Central Bank of Brazil launched its instant payments platform Pix on November 16. Pix allows consumers and companies to make money transfers 24/7 without requiring debit or credit cards through a Pix alias or a QR Code. It is also free of charge for individuals. Central bank president Roberto Campos Neto said the central bank is in talks with Bigtech players such as Google and Facebook about entering the Brazilian payments services market, and that WhatsApp will start doing P2P soon. https://www.bcb.gov.br/en/pressdetail/2361/nota

Banco Central do Brasil unveiled the general framework and updated rules for the country's instant payment system PIX, which will be launched gradually from November 16. From October 5, those interested in joining the system will be able to register the so-called PIX Keys, which will identify the payer and payee. To use the central bank's platform, users will need an email address, phone number or taxpayer ID. There will be three ways to complete the transfer: by entering the recipient's data, by using a QR code or by using a payment link. The central bank will both regulate and provide the payment settlement infrastructure, including the database with data on the accounts of recipients. Participating financial institutions will pay 0.01 reais per transaction to use PIX, versus an average of 0.07 in the current TED system. The minimum capital required is 1 million reais. https://www.bcb.gov.br/detalhenoticia/475/noticia

The president of Banco Central do Brasil (BCB), Roberto Campos Neto, reportedly said that the central bank would release Pix's technology to other countries. Launched by the BCB in 2020, Pix allows for instant, free, and immediate payments, and as of July 2022, more than 478 million passwords were registered on Pix. This system has been widely adopted in the country due to its simplicity and 24/7 availability.

This is a nice chronicle of how Facebook tried to exploit a loophole in Brazilian payments regulations to launch a WhatsApp-based payment service. First, in order to not be classified as a financial services company and be subject to capital reserve requirements and strict regulations, WhatsApp used Visa and Mastercard, which already had central bank licenses, to carry out the money transfers. (Visa and Mastercard did not notify the central bank they planned to perform transfers for WhatsApp because they thought they already had the required licenses.) WhatsApp was also looking to make use of a provision in payments regulation allowing companies to start services without a license until they reached certain transaction volume thresholds. However, the provision was aimed at encouraging small businesses to enter the market as opposed to a BigTech like WhatsApp with 120 million Brazilian users, so the central bank changed this provision on June 23 to allow it to suspend companies covered by it. In a further twist, the central bank is itself planning to roll out a fast-payment system in November, Pix, which uses consumers' checking accounts, and WhatsApp has said it is open to integrating its service with Pix.

"Back in November 2020, the Central bank of Brazil launched PIX, an instant bank transfer option that uses an app as a digital wallet and creates unique QR codes to facilitate transactions between users."

Banco Central do Brasil (BCB) reportedly aims to launch its central bank digital currency (CBDC) in 2024. It will be designed to encourage banks to tokenize their assets, so it sounds like it's being designed for niche cases, rather than general purpose usage.The huge popularity of the BCB's PIX payment system might argue for such an approach. Its use now surpasses transactions with credit and debit cards in the country.

"A central bank orchestrated payment system without system-specific payment assets meets most of the central banks' reasons for issuing CBDCs. It provides monetary and strategic autonomy for a critical infrastructure and meets user demand for digital payment solutions. As the example of Pix shows, such a system can compete successfully with existing and new payment services."

The Central Bank of Brazil has kicked off a new phase in the testing process for Pix, the upcoming national instant payments platform, with the simulation of transfers. The tests of the technology underpinning the settlement infrastructure will see participating institutions testing their settlement flows, so the process where resources are transferred from the payer to the recipient, with fictitious data.

Banco Central do Brasil will roll out PIX, an instant, 24/7 payments system enabled via QR codes, in November 2020. It will allow users to send and receive payments instantly via cell phone. The PIX's centralized and sole settlement infrastructure is the Instant Payment System (SPI)-to be operated and managed by BCB.

Banco Central do Brasil cleared the way for Facebook's WhatsApp messaging service to let its users send each other funds using the Visa and Mastercard card networks, months after vetoing WhatsApp's initial attempt. However, WhatsApp is only allowed to do peer-to-peer payments, not involving merchants, unlike the free Pix service, which can be used to pay businesses and individuals. Facebook is still seeking approval to operate with merchants. https://www.bcb.gov.br/en/pressdetail/2386/nota

"A recent report by EIU (The Economist Intelligence Unit) found that India is leading the real-time payments market, followed by China and South Korea. In terms of the mobile payment market, China leads instead, followed by India. Following the success of India's UPI, several countries are currently in the process of building instant real-time payment platforms. Brazil, for example, debuted its fast payment Platform, Pix, in late 2020. In early 2021, Saudi Arabia unveiled its new version of the instant-payments platform, Sarie, which facilitates a quick transfer of funds using various methods of identification, including mobile numbers and email addresses."

Banco Central do Brasil (BCB) published an FAQ on its under-development Drex central bank digital currency (CBDC). "Drex will bring more speed, practicality, and lower cost to various contractual and financial transactions... In the same way that Pix - the Brazilian instant payment ecosystem - has democratized access to payment services, Drex arrives to democratize access to financial services, such as credit, investment and insurance." Programmability through smart contracts on distributed ledger technology (DLT) networks will be a key part of Drex's platform. In the current testing phase, Drex is being developed on Hyperledger Besu.

The president of Banco Central do Brasil (BCB), Roberto Campos Neto reportedly introduced some novel ideas that the central bank has for a possible CBDC, including the integration of the digital real with traditional and decentralized financial structures and institutions. He also showed off a "super app" that will allow customers to hold stablecoins and the CBDC, and showcased the connection the system will have with the already available PIX payments network.

According to McKinsey, digital payment transactions grew rapidly in emerging markets during the past two years, as the pandemic accelerated shifts to contactless payments and e-commerce. E-wallets proliferated, real-time account-to-account transfers took off, and industry players formed new partnerships to access capabilities and broaden their customer base. Some of the fastest growth occurred in Africa and Southeast Asia, where low banking penetration gives payments providers opportunities to capture untapped potential and reach underserved populations... Margins for digital payments providers are already wafer thin and are likely to be eroded further by competitive intensity and declining fees. In many cases, payments are more a means to cross-sell other products than a profit center in their own right. Some services, such as peer-to-peer (P2P) payments, are usually offered to users for free in most markets. In Brazil, for instance, Pix is pushing margins down by offering P2P payments for free and person-to-merchant (P2M) payments at low cost.

"The Brazilian central bank does not see a need for a retail digital real due to the success of its Pix retail payment system. Deputy Governor Renato Gomes reportedly pointed out that the motivation for Brazil's CBDC project has been less about improving retail payments but rather creating a wholesale framework for innovation based on DLT."

The Banco Central do Brasil (BCB) announced the short list of eight projects selected in the 2022 Laboratory of Financial and Technological (LIFT). One of them is a proposal to convert a stablecoin on the Celo blockchain into Real Digital, studying the interoperability between the public blockchain that runs on the EVM (Ethereum Virtual Machine) and the central bank digital currency (CBDC), in addition to the possible interoperability with Pix.

"In this paper, we show that approaches based on this type of CBDC design are unlikely to satisfy user demand. We argue that it is more important to focus on the payment system. Drawing on the experiences in Brazil (Pix) and Switzerland (Twint), we show that successful payment systems do not require users to hold system-specific payment assets, making them convenient and accessible. An important motive for the ECB to develop a digital euro is to preserve monetary sovereignty and strategic autonomy. A European payment system could ensure autonomy over such a critical infrastructure of an economy. For it to succeed, the ECB should look to and learn from the best examples."

Banco Central dos Brasil (BCB) announced the start of a (wholesale?) central bank digital currency (CBDC) proof-of-concept (PoC) project aimed at providing payment rails executed on distributed ledger technology (DLT) to support the provision of retail financial services, including the purchase and sale of tokenized government bonds, settled through tokenized bank deposits. The PoC is not aimed at leveraging digital payments, as this is already being done on a large scale with Pix, which was launched at the end of 2021 and has been widely adopted.