Central Banks, the Monetary System and Public Payment Infrastructures: Lessons from Brazil's Pix

8 Pages Posted: 6 Apr 2022

See all articles by Angelo Duarte

Angelo Duarte

Central Bank of Brazil

Jon Frost

Bank for International Settlements; University of Cambridge - Cambridge Centre for Alternative Finance

Leonardo Gambacorta

Bank for International Settlements (BIS); Centre for Economic Policy Research (CEPR)

Priscilla Koo Wilkens

Central Bank of Brazil; Cornell University

Hyun Song Shin

Bank for International Settlements (BIS)

Date Written: March 23, 2022

Abstract

Public payment infrastructures build on the central bank’s foundational role in the monetary system by promoting competition and interoperability between payment platforms. They can reduce costs for users and promote financial inclusion. Brazil’s recent experience with the Pix retail instant payment system illustrates the potential gains. In little over a year since its launch in November 2020, Pix has signed up 67% of adults in Brazil, with free payments between individuals and low charges for merchants. The two key ingredients in the success of Pix are, first, the mandatory participation of large banks to kick-start network effects for users, and second, the central bank’s dual role as infrastructure provider and rule setter.

Keywords: Central banks, financial inclusion, innovation, payments

JEL Classification: E51, G23, O31

Suggested Citation

Duarte, Angelo and Frost, Jon and Gambacorta, Leonardo and Koo Wilkens, Priscilla and Shin, Hyun Song, Central Banks, the Monetary System and Public Payment Infrastructures: Lessons from Brazil's Pix (March 23, 2022). Available at SSRN: https://ssrn.com/abstract=4064528 or http://dx.doi.org/10.2139/ssrn.4064528

Angelo Duarte

Central Bank of Brazil ( email )

P.O. Box 08670
SBS Quadra 3 Bloco B - Edificio-Sede
Brasilia, Distr. Federal 70074-900
Brazil
+5561981387740 (Phone)

Jon Frost (Contact Author)

Bank for International Settlements ( email )

Basel
Switzerland

University of Cambridge - Cambridge Centre for Alternative Finance ( email )

10 Trumpington Street
Cambridge, CB21QA
United Kingdom

Leonardo Gambacorta

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Priscilla Koo Wilkens

Central Bank of Brazil ( email )

P.O. Box 08670
SBS Quadra 3 Bloco B - Edificio-Sede
Brasilia, Distr. Federal 70074-900
Brazil

Cornell University ( email )

New York
United States

Hyun Song Shin

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

HOME PAGE: http://www.bis.org/author/hyun_song_shin.htm

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
673
Abstract Views
1,684
Rank
74,940
PlumX Metrics