A political-economic analysis of PIX, the Brazilian Central Bank payment system
João Pedro de Souza Domingues | Originally Published: 31 January 2026
In November 2020, the Brazilian Central Bank (BCB) launched a new, BCB-operated, instant payment system called PIX. Almost 5 years later, in October 2025, there were close to 170 million users in the country. With a population of 213 million people, PIX is now ubiquitous in Brazil, and a clear success. It has become the primary method of money transfers in Brazil, attracting some attention from academics.
The potential consequences and meaning of PIX’s success story have not been accounted for completely. The internal effects on the financial system, employment, economic growth, and other variables have grabbed increasing attention in the past few years. The external effects, however, have been generally sidelined from any academic discussions. Consequently, in this article, I examined PIX through the lens of a Central Bank Digital Currency (CBDC) in order to better understand how the new payment system can affect Brazilian financial independence, and technological and monetary sovereignty.
Defining PIX as a CBDC
For this study to be valid, it needs to be established that PIX has a number of similarities with CBDCs, and thus can be studied with similar tools. In this sense, this essay will work with the following definition of a CBDC set out by Lambis Dionysopoulous: “a digital liability of a CB [Central Bank], or other competent authority, representing a jurisdiction’s sovereign currency available to the private sector”. There are three aspects to break down from this definition: the Central Bank’s digital liability, sovereign currency, and the availability of that currency in the private sector. Since the digital liability aspect is the most complex one, for the sake of simplicity, this article will first explore the second and third aspects.
There is little to debate around these two aspects. All PIX transactions are first denominated in the Brazilian real (BRL). PIX only conducts transactions between accounts of financial institutions previously admitted to the BCB’s Instantaneous Payment System (SPI), which only operates in BRL. Thereby, through PIX, individuals and firms can use their private financial institution accounts to make payments to another firm’s or individual’s account. Therefore, it is accurate to define PIX as a sovereign currency accessible to the private sector.
Turning to PIX’s digital liability component, I make a less direct argument. Digital liability, in the context of PIX, rests on the fact that “CBDCs are backed by assets on central banks’ balance sheets while instant payment systems are operated through commercial banks.” Nonetheless, since 2002, the BCB has assumed the role of “implicit safeguard” as it guarantees all daily transactions to avoid systemic risk. Thus, the digital liability aspect is indirectly fulfilled by the particular position of the BCB within the national payments system, functioning as a systemic backer of all transactions.
Alongside the many similarities in the definition, PIX has other similarities to CDBCs. In his article on technology and monetary sovereignty, Colin Chia explains how “the early adopters [of CDBCs] tend to be states that have high circulation of foreign currencies, large informal economies, or limited reach of the banking system.” Brazil checks the latter two boxes of that description, with a growing number of informal workers and a large proportion of the population excluded from the banking system. Chia also writes that “CBDCs primarily address the medium of exchange function of money, with a secondary impact on the unit of account and store of value functions.” This is exactly the case with PIX: it has fundamentally changed the “medium of exchange” function of money in Brazil.
The International Effects of PIX
Having established the similarities, I will now analyze PIX through the perspective of a CBDC. Since “states are situated differently in the global hierarchy of money,” CBDCs are a way to increase monetary sovereignty and compete in this hierarchy. Moreover, despite CBDCs having no power to upend the International Monetary and Financial System, they can change it incrementally over the long run. There are essentially two external effects: greater monetary sovereignty (internal concerns), and greater international projection (external power).
First, there are internal concerns, which can be divided into two elements: financial inclusion and control over transactions. Financial inclusion was a prominent issue in Brazil before PIX’s implementation, as Brazilian banks have historically struggled to provide credit and banking services to the general population. From 1960 to 1980, most financial developments were designed by Brazil’s developing domestic industry; thus, credit was canalized from foreign borrowing to large loans for industrialists. Subsequently, the government instituted some credit reforms made to include smaller firms and individuals, but these were inconsequential. By 2010, despite other attempts at reforms, Brazil’s commercial banks were too dependent on foreign borrowing, evidenced by the great credit supply decrease after 2008. This crisis prompted policy-makers to strive for more financial inclusion, leading to the eventual development of PIX.
Currently, PIX’s implementation reflects the increased monetary sovereignty that ensues from financial inclusion. . PIX reduces transaction costs for most Brazilians, allowing them to enter the financial system by providing high liquidity. Due to the “minimum technical infrastructure guaranteed by the [BCB] within the apps of PIX participant institutions,” many people, including those distant from bank branches, have a digital account through which they can easily transfer money anywhere. As such, PIX is strengthening Brazil’s monetary sovereignty by extending the official currency’s reach.
Regarding control, the variable is the BCB and its role in Brazilian monetary policy. The BCB has had, even more than most CBs, a very defensive approach towards its prerogatives. Due to its historical bureaucratic struggle to acquire independence and become the country’s “de facto” monetary authority, the BCB became concerned with any form of usurpation of its power. With the rise of Big Tech and Fintech, there was a threat to the BCB’s jurisdiction and power to enforce regulation. Consequently, the institution opted to increase its control and oversight of the payment systems in Brazil to address the challenges of digitalization of the economy.
In 2020, a dispute between the BCB and Meta illustrated the tensions between the central bank and Big Tech. Meta implemented WhatsApp Pay in June of that year, allowing millions of Brazilians to conduct transactions through Meta’s message app. 8 days after the announcement, the BCB announced that the multinational company’s initiative was suspended until further authorization due to anticompetitive and systemic concerns. Given WhatsApp’s preeminence in Brazil (over 93%of the population are active users), the monetary authority expressed that WhatsApp Pay could rapidly become an “exclusionary and anticompetitive market structure.” Furthermore, the BCB halted the project due to its underlying structure: the transfer system was to be operated by only three companies, two foreign (Visa and Mastercard) and one national (Cielo), while only three financial institutions were partners in WhatsApp Pay, which could have caused liquidity issues. Brazil’s regulatory bodies withheld authorization until early 2021, a moment in which PIX was already the “protagonist of the payments system stage,” with more than 700 partner institutions. This was a clear victory of the BCB in upkeeping monetary sovereignty, using its regulatory power and ultimately PIX as a countervailing force to those of Big Tech.
The external power of PIX is the least studied and empirically backed effect of the payment system. PIX was created in late 2020, so there has been little time for any international effects to take place and be thoroughly analyzed. However, using the CBDC literature, some analyses can be made, namely the international expansion of PIX and potential Brazilian-led de-dollarization efforts.
A process of expansion of PIX to other countries can already be observed. While there is no official data regarding this measurement, international financial institutions can join as long as they are approved by the BCB, have over 500 thousand accounts and operate in BRL. Additionally, there has been unofficial reporting of business in a number of countries accepting PIX as payment, mainly Argentina (Buenos Aires), the United States (Florida), and Portugal (Lisbon), most likely due to the large number of Brazilian tourists. This process is similar to how open CBDC models function. When a country introduces a CBDC, other countries will see an increase in “competition for deposits between the foreign central bank and private sector banks,” which is slowly occurring in those countries that receive a large number of Brazilians. Local tourist businesses are increasing the demand for BRL and creating accounts in Brazilian banks, leading to capital outflow from these countries. In the long run, “domestic commercial banks may be drained of a significant fraction of their deposits” due to the use of PIX in these other countries. Since the use of PIX in other countries is tied to tourism, for this effect to grow and have such significant consequences, there would need to be a large increase in the Brazilian middle class, disposable income, and travel.
In the long run, PIX can assist in the process of reducing national and regional dependency on the dollar. Belluzo and Viera suggest that this may be one of the reasons the Biden and second Trump administrations both launched investigations into PIX. That said, as explained by Bruno De Conti and Jean-François Ponsot, “the creation of a CBDC is not in itself a silver bullet for the de-dollarization, be it at the national or at the global level.” However, the creation of CBDCs, especially by developing countries, can provide a pathway to de-dollarization; the key element of such a project, they argue, is “a strong attention to the design of digital payment systems which aim at strengthening the ‘money governance’.” PIX proves a robust tool of monetary sovereignty, being a clear example of a potential challenge to dollar hegemony in the region. Specifically, if other countries follow on PIX’s footsteps and create their own CB-operated payments system, the dollarization in those respective countries might be significantly reduced; if other countries substantially use PIX, the use of dollars for international transactions between Brazil and these other countries might be also substantially reduced.
Similarly to Brazil, Nigeria and the Bahamas implemented CB-operated payment systems, and in both countries, it increased financial inclusion. Furthermore, CBDCs have advantages beyond financial inclusion, which is why even developed countries with high financial inclusion have introduced CBDCs (ex: Canada, US, Denmark, Japan, Sweden and Switzerland). Thereby, as the dollar becomes a less reliable currency, countries across the globe stand to benefit greatly from CBDCs and CB-operated payment systems.
Conclusion
This article presupposes the claim advanced by De Conti and Ponsot, that “the most significant and consequential shifts have been instigated by state responses to extraordinary events.” Consequently, it engages with PIX through CBDC literature, which is based on the actions and reactions of states to the digitalization of the global and national economies. By interpreting PIX as (essentially) a CBDC, it is possible to complement the existing literature on PIX with an international dimension, assessing the internal concerns of monetary sovereignty and the external projection of power. Specifically, it analyzes how PIX increases financial inclusion and the BCB’s control over transactions, building Brazil’s position as a monetary sovereign nation in the hierarchical International Monetary and Financial System. It positions PIX as a political economic phenomenon that can have significant impacts in the International Political Economy. As pointed out by Belluzo and Viera, “whoever controls how money flows controls how power flows.” If these effects will reduce, intensify themselves, or be overpowered, remains to be seen.
João Pedro de Souza Domingues is a third-year student at the University of Toronto. He is double majoring in Economics and International Relations, while minoring in Political Science. Joao is the Copy Editor for The Attaché’s Commentary Division (2025-2026). In his free time, he enjoys playing Souls-like games and tennis, despite the Toronto weather.
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