ECB considers linking TIPS with Brazil’s Pix system

The European Central Bank is assessing the feasibility of interlinking its TARGET Instant Payment Settlement platform with the Central Bank of Brazil’s Pix system. This potential connection would represent the first cross-border expansion of Pix, a payment method that currently dominates transactions within Brazil. The European central bank confirmed it was reviewing the matter after a Reuters inquiry regarding claims that the two institutions were considering such a link. The Central Bank of Brazil declined to comment on the reports.

Technical teams from both central banks are currently evaluating whether an interconnection between the two systems is technically viable. If the assessment is successful, a pilot project could be launched in 2028. This development follows a shift in tone from Brazilian authorities, who in August expressed greater certainty than in the past about linking Pix to similar instant payment systems in other countries. An earlier report from 2023 had stated only that Pix might be integrated with other nations’ systems in the future.

The Central Bank of Brazil has outlined several potential benefits of connecting Pix with other instant payment networks. These include lower costs, accelerated transactions, broader access, and improved transparency in cross-border payments. The move aligns with the rapid growth of Pix since its launch in 2020. Recent data indicates that the system has reached 70% of Brazil’s population, amounting to more than 150 million users. It now processes more transactions than Visa and Mastercard combined. The system has also been extended to Argentina, allowing Brazilians living there to make cross-border payments and transfers. This growth has helped establish instant payments as a standard feature in Latin America and boosted financial inclusion by encouraging the opening of digital accounts across various societal segments.