The recent attack on the Pix system by the US government has led to a situation that could tip the balance in favor of either candidate by the next election, with President Lula leading the prediction market by a narrow margin.
Pics participates in political commentary in Brazil as elections approach
Pix, one of the world’s largest instant payments networks, is a hot topic in Brazil as the upcoming presidential election approaches.
The system, which has more than 175 million users, is currently attracting political attention. A recent report from the Office of the United States Trade Representative (USTR) raises concerns about the increased use of this network and its impact on private alternatives.
“U.S. industry representatives have expressed concern that the central bank’s support for Pix will disadvantage U.S. electronic payment service providers. Additionally, the central bank is requiring financial institutions with more than 500,000 accounts to adopt the use of Pix,” the report said. Major credit card giants such as Visa and Mastercard will likely push for measures to bring them on par with Pikus.
President Luiz Inacio Lula da Silva has defended Picus, saying it could distort international trade by weakening the dollar, even if U.S. authorities could impose sanctions in the future.
Lula said:
“What we say to anyone who wants to listen is that Pix belongs to Brazil and no one is going to force Pix to change because of the services it provides to Brazilian society.”
Several posts on social media have since accused senator and presidential candidate Flavio Bolsonaro of trying to end the Picus system, which is seen as a natural ally of President Trump and the US government. Nevertheless, Bolsonaro quickly denied these claims, stating that PIX is “already an asset of Brazil and a very important legacy created by President Jair Messias Bolsonaro.”
At the same time, Mr. Bolsonaro accused President Lula of intending to tax PIX transactions. “Thanks to the Bolsonaro government, Pikus will be free without taxes. But the dream of the PT and Lula is to tax Pikus,” he stressed.
Nobel laureate Paul Krugman hailed Picus as the “future of money”, stressing that incumbent financial institutions have too much power to allow public systems to compete with their products.
FAQ
Why is the US concerned about Brazil’s Pix network? USTR argues that Brazil’s obligation to support the Pix system unfairly disadvantages U.S. private electronic payment providers such as Visa and Mastercard.
How is President Lula responding to international pressure? President Lula staunchly defended the payment network, saying Brazil would not change its public systems despite possible sanctions by the United States.
What is presidential candidate Flavio Bolsonaro’s stance on Picus? Sen. Bolsonaro has denied rumors that he plans to dismantle the network, instead billing it as a conservative legacy and accusing President Lula of wanting to tax the network’s transactions.
How do international economists view Brazil’s payment system? Nobel Prize winner Paul Krugman recently hailed Pix as the “future of money” that successfully counters the forces of traditional financial monopolies.
