With almost two years of existence, the Brazilian instant payment system – known by the popular acronym Pix — fell into popular taste. Now, whoever wants to copy the idea is the biggest Banco Central of the world, the Federal Reservetwo United States.
In a virtual press conference, the vice president of Fed, Lael Brainard, made the announcement that the US Pix should come out between May and July next year. The so-called FedNow “will be an important innovation for the payment system in companies of any size in the United States”, in the words of Brainard.
Like Pix, the system will also be available 24/7 and the idea is to make transactions instantaneous. Further information on the costs of trading using this method was not disclosed.
Digital dollar, make a Pix there
O FedNow emerged in the wake of debates on the creation of a Central Bank Digital Currency (CDBC, in English). In the US, this Central Bank cryptocurrency will be the digital dollar — in the Brazilian case, the digital real, which is also at a more advanced stage than its US counterpart.
This is because FedNow would serve to replace the digital dollar project in the person-to-person payments sector (peer-to-peer or P2P). Some representatives of the American Central Bank are against the creation of a cryptocurrency issued by the monetary authority.
In the Brazilian case, the digital real would be focused on transactions between companies (business-to-business or B2B), given that Pix already fulfills this role in retail.
Why did it take so long?
Wall Street may seem extremely modern and up-to-date, but the rest of the United States really likes paper money. Digital transactions are not very popular in the country.
In fact, Brazil is considered a hotbed of digital innovations in the financial field.
According to the president of the Brazilian Central Bank, Roberto Campos Netother countries followed the development of Pix and intend to copy the project in their respective environments.
The Fed preferred to put aside financial innovation and focus more on the security of its systems – after all, a failure in the world’s largest central bank would be globally chaotic.
Go Brazil! Pix and CDBC on the front
While Pix is already a reality in Brazil’s daily life, the digital real project should be launched at some point in 2023 — but the tests will begin in September this year, according to the Central Bank’s Lift Challenge calendar.
Already both FedNow and the digital dollar are promises that should start being debated in 2023. The mid-year elections in the US, scheduled for November 8, should further postpone the calendar of debates on these proposals in 2022.