Pix: How Brazil’s Central Bank-Backed Payment System Is Reshaping the Crypto Landscape

In November 2020, when the Central Bank of Brazil launched an instant payment system called Pix, few expected it to become the payment leader of the largest economy in Latin America within three years.

Today, over 160 million Brazilians—two-thirds of the country’s total population—can access with a simple tap.24⁄7Real-time transfers, 0 transaction fees, funds arrive in seconds. Small merchants’ collection costs have decreased from 2.34% for credit cards to 0.33%, and even beggars have printed Pix payment codes on their begging signs. With the cryptocurrency exchange Gate.io announcing its integration with Pix, this efficient local payment channel is becoming a strategic pathway for cryptocurrency assets to enter the Latin American market.

Pix’s core arsenal

Pix is not an ordinary payment tool, but rather a national-level financial infrastructure developed and operated directly by the Central Bank of Brazil (Banco Central do Brasil). It adopts a disintermediated clearing model, allowing funds to flow directly between payment institutions, bypassing traditional elements such as card organizations and acquirers. Unlike digital wallets that rely on underlying bank cards, Pix itself is the rail. Its technical architecture has three main pillars:

1. Real-time full-time clearing system: utilizes real-time netting instead of scheduled netting, achieving true “instant payment” and supporting a transaction volume of 2,000 transactions per second and a daily peak of 153 million transactions.
2. Unified Identity Identifier Library (DICT): Users generate Pix Key using their phone number, email, or tax number, replacing complex bank account numbers.
3. Mandatory Participation Mechanism: Financial institutions with over 500,000 users must be connected to ensure network coverage without dead spots.

For consumers, Pix is deeply integrated into bank apps, allowing them to pay by simply scanning a QR code or entering a Pix Key, offering an experience similar to WeChat Pay without the need to link a bank card. Merchants connect through payment service providers like Adyen, with settlement periods reduced to 1 day and costs only a fraction of credit card fees.

From financial instruments to social infrastructure

The popularity of Pix is nothing short of phenomenal. In just two and a half years since its launch, the number of users has surpassed 140 million (80% of the adult population) and 13 million businesses. By early 2024, the user base is expected to further rise to 160 million.

Several key data reveal its dominance:

1. Transaction volume five times that of bank cards: Pix payment volume reaches five times that of total debit and credit card transactions.
2. The world’s second-largest real-time payment system: second only to India’s UPI, with an average of over 100 million transactions per day.
3. Financial Inclusion Revolution: Enabling over 70 million people who have never conducted electronic transfers to enter the digital financial system, with the unbanked population ratio reduced from 30% to 16%.

Vendors on the streets of Brazil have Pix QR codes at their stalls, and in kidnapping cases, criminals even force victims to make transfers using Pix—prompting the Central Bank to set a nighttime limit of 1000 reais. This level of penetration makes it a payment gateway that international platforms like Gate cannot easily bypass when entering Brazil.

What does Gate’s integration with Pix mean?

For Gate, integrating Pix is not just a simple addition of a recharge channel, but a strategic key to unlocking the Latin American market. Latin America has long faced the dual dilemma of high costs and low efficiency in traditional finance. Cross-border remittance fees can exceed 10%, and the bank account penetration rate is insufficient, yet the smartphone penetration rate exceeds 70%. In high-inflation countries like Argentina and Venezuela, cryptocurrency has effectively become a “digital dollar” used for value preservation and payments.

Pix provides three key interfaces:

• Fiat currency deposit and withdrawal channel: Users can directly purchase cryptocurrency using their bank account balance, bypassing the high fees of credit cards.
• Localized experience entry: Compliant with the payment habits formed by Brazilians, lowering the threshold for encryption transactions.
• Anti-fraud infrastructure: Central Bank managed real-name Pix Key system, more traceable than traditional bank transfers.

Gate has pointed out in its analysis: The new generation of payment companies can build a real-time, 24/7, global parallel financial system through “encryption payment rails”. Pix is the ready-made localized rail, which will unleash greater energy when combined with the encryption ecosystem.

Future Vision: When Pix Meets Encryption Track

The possibilities after Gate connects with Pix go far beyond simple deposits and withdrawals, potentially catalyzing four innovative scenarios:

Cross-border payment chain of stablecoin + Pix

The Central Bank of Brazil has launched the internationalization of Pix, allowing tourists to pay with Pix in Argentina and Uruguay, enabling merchants to receive local currency or stablecoins instantly. Gate can build a closed loop of “Pix deposit → exchange for stablecoins → cross-border transfer,” challenging the high-cost system of SWIFT.

Real-time fiat channel for DeFi

The instant settlement feature of Pix allows off-chain funds to quickly enter DeFi protocols. Imagine a scenario: a small merchant in Brazil deposits reais via Pix in seconds, automatically converts them to DAI, and participates in on-chain lending— a process that traditional banks take several days to complete is compressed to a matter of minutes.

Anti-Inflation Encryption Savings Plan

For markets like Argentina, where the annual inflation rate exceeds 100%, Gate can launch the “Pix Investment” feature: users can set up daily automatic deductions through Pix. Buy Bitcoin or stablecoins, turning the convenience of Pix into encryption savings tools.

Participate in the Central Bank digital currency bridge experiment

The Central Bank of Brazil is promoting the interconnection of Pix with global payment systems through the G20. The Nexus project of the Bank for International Settlements (BIS) has chosen Pix as the connecting object, allowing Gate to intervene in the interoperability experiments between Central Bank Digital Currency (CBDC) and encryption.

Pix Future Outlook

Roberto Campos Neto, the President of the Central Bank of Brazil, announced at the G20 venue: Pix will go global. Restaurants in Uruguay have started accepting Pix payments from Brazilian tourists, with funds instantly converted into local currency. The Central Bank of Italy is actively exploring bilateral agreements, and the Bank for International Settlements has included Pix in its cross-border payment pilot project Nexus.

When Gate’s encryption account connects with Pix’s instant transfer network, Brazilian housewives will be able to buy USDT faster with their grocery money than New York traders can place stock orders—perhaps the mainstreaming of crypto payments will begin to spread from this tropical rainforest.