As of 2022, more than 30 million Brazillian citizens have no bank accounts, and no credit or debit cards. What’s wrong here?
For roughly a decade, Brazil has been passing legislation aimed at changing the situation. However, the results have fallen short of expectations. To better understand the reason, let’s take a step back to look at a historical perspective.
The Brazilian banking industry has always been extremely concentrated, historically due to the country’s macroeconomic volatility, the bank’s legacy technology and stringent oversight. At one point in time, the regulator needed some reliable “bulwarks” to build the local financial system and deal with scale. Concentration was an inevitable flipside of that strategy.
However, in the past few years, the balance started to shift, with regulators fostering competition through novel legislation in tune with technology trends, smarter controls and a better macroeconomic environment. This process, combined with the “software is eating the world” phenomenon, greatly contributed to creating a prolific environment for the fintech boom.
Related: 5 reasons 2023 will be a tough year for global markets
In 2020, the Brazilian Central Bank launched PIX, an instant payments infrastructure that works 24/7 and whose adoption was off the charts. Today PIX has more than 122 million active users, or 57% of the Brazilian population. Thanks to this innovation, 40% of users made their first electronic transfer ever, which denotes the enormous potential of technology for financial inclusion. Given its sheer success, no wonder PIX quickly became a benchmark for many countries and has been praised by the Bank of International Settlements.
The Open Finance program was another important step for
Read more on cointelegraph.com