The Central Bank of Brazil had been working on it for a few months and has now announced that the PIX will come into force in November 2020. A true banking revolution, the PIX will give traditional banks a head start over cryptos. Let’s discover what PIX is and its impact on cryptos in Brazil.
PIX is an instant payment service created by the Central Bank of Brazil. This system will facilitate the transfer of funds between different banks. Transfers will be free and can be made at any time, 24 hours a day, 365 days a year.
More than a change, it is a revolution in Brazil. Indeed, until now, transfers were only possible during working days, between eight in the morning and five in the evening. Moreover, these transfers generated significant costs. Depending on the case, the operation could take several hours or even days.
The PIX system will allow transfers to be made from an ATM or a bank account. But the particularity is that it will also give the possibility to people outside the current banking system to carry out such transactions. Indeed, transfers will be able to be made simply from a smartphone by scanning a QR code. The Central Bank of Brazil is even studying a system that will allow transfers to be made without an internet connection, thanks to QR codes stored on smartphones.
With about 30% of Brazil’s population without a bank account, this service certainly has a bright future ahead of it. But by the way, isn’t that exactly what crypto promises to do?
Brazil is not a very Bitcoin-friendly country. Certainly, there is a generalized distrust of the population towards the banking system. Moreover, the country is the one that hosts the offices in charge of Ripple’s development in South America. However, it is clear that crypto, starting with Bitcoin, has not yet managed to infiltrate Brazil.
There is no doubt that the advent of PIX will not help the development of crypto in Brazil. Indeed, with instantaneous and free transactions that can be made at any time, so much so that the PIX works on the cryptos’ turf. In fact, the PIX takes cryptos at their own game. With this new weapon, the government intends to nip the idea in the bud.
But does this mark the death of crypto in Brazil? Nothing is certain. In recent years, cryptocurrencies have shown their resilience and ability to adapt and innovate. For the time being, Ripple has not commented on this decision of the Brazilian Central Bank, even though it is in regular contact with representatives of this crypto. The crypto industry (and Ripple in the lead) intends to retaliate against this direct attack with their own innovations.