PIX payment system may become digital identity in Brazil, says Central Bank president

RIO DE JANEIRO, BRAZIL – Central Bank (BC) president Roberto Campos Neto said that Pix, the Brazilian instant payment service, may evolve to other functionalities and eventually become a kind of digital identity.

“We understand that we can expand this [the Pix] to improve even more the quality of life of people with public services and eventually even becoming a digital identity, as was done in India,” he said during a virtual event promoted by the Indian Embassy on Wednesday, April 14th.

“The project can have other dimensions. We have developed new features in Pix that come from the interaction with society, from understanding the demands. We can expand the platform to have a greater gain in efficiency,” he added.

The Central Bank did not detail how the digital identity linked to the Pix would be and if it could replace the official document.

According to him, people’s rapid adhesion to the instant payment system was a surprise.

“We expected something like 20 million in six months and that was done in a few days. Today we have 206 million keys [in Pix],” he said.

Campos Neto also pointed out that digitalization can make public services more efficient and less bureaucratic. According to him, the movement started in payment means, but can evolve to new business models and to the provision of services, including public ones.

“This can evolve to be a model of government service delivery, in which more services are provided digitally, more cheaply, and with less bureaucracy. People can hire services, open cons, request resources, and other day-to-day things,” he evaluated.

He also said the authority is still working out “small details” of how the Brazilian digital currency will be. It is under discussion, he said, if it will be remunerated and traceable, as well as if the Central Bank will be the sole issuer.

Campos Neto said he has talked with monetary authorities from other countries and that there should be coordination between central banks.

The CB president said that open banking, or open financial system, will enable customers to receive offers of products and services more suitable to their profile and cheaper. In addition, the tool will open the way for new business models within the financial system.

Open Banking has been implemented in Brazil since the beginning of this year and will allow consumers to share their data and choose the most advantageous financial products on a single platform.

Later, in an event promoted by Itaú BBA, BC’s Regulation Director Otavio Damaso, stated that he considers the open banking process inevitable. “Those who haven’t made the move yet will eventually have to do it, and perhaps with delay, which can be harmful,” he said.