The Instant Payment Mandate: The Central Bank of Brazil and Pix

By: Lauren H. Cohen and Spencer C. N. Hagist

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Synopsis: Jo o M. P. De Mello and his team at the Central Bank of Brazil are preparing a move that would seek to tilt the scales in favor of financial inclusion for the entire country. The innovation at hand is the unprecedented nation-wide instant payment scheme: Pix. The fruit of years of planning and patience in the face of a banking industry refusing to change, De Mello seeks to kick start a wave of pro-consumer FinTech advancements for a sector whose growth has been relatively halted. While the success of similar wide-spread payment structures using mobile technology have drawn a clear roadmap in other countries, no other central bank has ever dared to undertake the task itself, preferring instead to let the private sector push ahead and regulate later. Pix would be the first instance of a government taking such massive upskilling into its own hands. At the same time, the risks De Mello and his team face will be entirely new as well. Will Pix be the highway to modernity so many imagine? Or will its challenges prove insurmountable, tarnishing growth and turning the country away from trusting the BCB at such a scale ever again?