reese_john

It is a testament to the bloat and overreach of the Brazilian state in the economy. Such endeavors should be left to the private sector

I suggest you go read the SFN messaging manuals from BCB if you truly want to understand how interbank communication works. It is very well documented.

You clearly don’t know what you are talking about since you are conflating the STR (transfer reserve system) with TED (one of the many settlement methods in STR)

I don’t even understand what you mean by “banks had to talk to each other” and why you are referring to TED in the past tense when it’s still the largest settlement method by BRL amount

Have you ever worked in a financial institution?

This is such a common occurrence that the BCB had to impose a default $200 nightly limit for Pix trns between 8pm and 6am.

The way it works is, criminals use money mules, or stolen identities, to open legitimate bank accounts, then once the cash hits the account, they fan out the stolen proceeds to crypto rails or other money mules (“laranjas”)

BCB has been trying to solve this with MED 2.0 but it is still a duct tape over the real problem: rampant crime and fraud in Brazil

And let’s not dive into the digital bank heists that have been happening since the last year, when hackers have already managed to steal hundreds of millions of dollars from the financial system by exploiting Pix’s 24/7 network [0]

Such attack to the financial system would have been akin to a war declaration in serious countries, but crime is so widespread and normalized that Brazilians lowered their standards to accept these absurd situations

  [0] Hackers steal R$400m in attack on Pix-connected fintech: https://valorinternational.globo.com/google/amp/markets/news/2025/07/02/hackers-steal-r400m-in-attack-on-pix-connected-fintech.ghtml

> Second, good - they should have an _algorithm_ checking every transaction. MasterCard and VISA do it and do nothing for me;

You are confusing transaction authorization done by card networks/issuers with the kind of fraud analysis that happens post settlement and requires correlating multiple transactions and accounts

> the government could catch all the money laundering

No, you don’t have enough information in transactions alone to identify all money laundering, specially the sophisticated kind.

Yes, but my point was more nuanced, I didn't mean to say that the state needs a fully owned solution.

The original article opens up with "Pix is igniting a geopolitical and commercial battle."

The point I was trying to make, specially in the last paragraph, was that: Brazil doesn't really have full control, or the capability, to operate Pix without US infrastructure. Therefore, it is not smart, to engage in a geopolitical, ideological battle against the US. If Brazil wants to tough it out and claim sovereignty, then it must be willing to walk away and build its own infra.

Case in point: the recent US-Canada tensions were enough for the Canadian government to consider cancelling the purchase of American-made F-35 fighter jets.

Is the Brazilian government willing to do the same? Is it even in its best interest to do so? In my opinion, no, hence the aggressive anti-US rethoric from Lula must stop

> I'm here just to clear out the confusion regarding the infrastructural pieces. The core PIX is undeniably sovereign and state-owned

Sure, I can see the confusion, I should have made that clearer.

Let me rephrase it: the "core PIX" is mostly an implementation of ISO20022 (pain,pacs, etc) messaging on top of HTTP APIs and BCB's own ledgers, plus a centralized KV datastore (Dict).

The implementation was excellent, but there is no technical moat in the "state-owned" part of the solution

The biggest technical challenges were, by design, delegated to the private sector, heavily relying on US hyperscalers to achieve Pix's operational requirements.

> The "investigations" are political posturing. PIX is not "unfair business practice"

Agree

> its a modern, cheap, state-of-the-art payments system that is better than what private businesses like MasterCard and Visa are willing to offer. I can think of plenty of ways they could offer actual value to customers so they can still be relevant.

This is a common misconception. Pix is a form of bank transfer, not a full blown payment infra like MC/Visa. They are different products, Pix doesn't make credit cards irrelevant.

Per BCB statistics: In 2020, before Pix implementation, credit cards accounted for 2% of the monthly BRL volume transacted (~ 200M BRL)

As of 2025Q4: credit cards still accounted .... for the same 2% (~ 800M BRL)

The main question is: historically, why haven't credit cards been more popular in Brazil, even before Pix?

You'll find your answer looking at structural issues (high interest, delinquency rates, bad credit offerings ...), not technical concerns

> Banco Central controls the core, and that's all it needs to. This is good design. Descentralized, modern, resilient and efficient.

I agree. But was that not the case before Pix/SPI? It really didn’t change the status quo.

The STR (transfer reserve system), which SPI is still fully dependent in practice btw, is decentralized, modern and efficient.

The biggest change here was scale and adoption by private banks and end users, not sovereign infra.

Please, he literally went on national TV on Brazil’s Independence day to claim that

“We will defend PIX from any attempt at privatization. PIX belongs to Brazil, it's public, free, and will remain so.”

Lula has been historically hostile to the US for ideological reasons.

He’s done plenty to undermine that relation, stemming from attacking the dollar dominance, ignoring Iran sanctions, to indirectly financing the Ukraine war by becoming the largest buyer of cheap Russian oil — and that’s why we have those investigations going on

This is a minor technicality, if private banks are down then the SPI is basically useless. Banks can send money to each other but clients can’t see it.

> What went down were apps

Plus, this is an oversimplification.

Transaction authorization, Fraud/AML screening, account validation are not just part of an “app”, they are core functionality of private banks operations, and they are made scalable by big cloud providers.

The true scaling burden is on private banks not the BCB

> But mentioning Brazil's president on this meter just adds even more politics to the discussion.

This quote is literally from the linked article — he is mentioned there

> Do you have the same opinion about the European leaders that are creating/created cloud infrastructure?

I don’t understand the question, I think it’d be great to have an European AWS equivalent just for the sake of competition, but as far as I know, we are very far from that

This is not a real problem outside of niche industries

American companies are great to do business with.

Most countries, including Brazil, simply don’t have the capability to pull this on their own. Not enough tech talent nor infrastructure