Latam Insights: Global Pix, Mercado Libre Ends Token

The Central Bank of Brazil has revealed its next steps to keep improving and growing Pix, the ubiquitous instant payment system used by almost all adults in the country.

While Pix is already available internationally in Argentina, the U.S., and Portugal, this new initiative would make it permanent, interconnecting instant national payment systems and streamlining settlements. Pix already serves over 175 million users in Brazil and has intermediated nearly 200 billion transactions since its launch in November 2020.

Starting April 17, users can no longer buy, sell, or earn mercado coin through the platform. Holders have three options before the deadline: sell tokens through the Mercado Pago app, spend the balance on Mercado Libre purchases, or do nothing. Any remaining balance after April 17 will be automatically converted to local fiat currency, Brazilian reais for most users, and deposited into their Mercado Pago account.

Pix, one of the largest instant payment networks in the world, has become a meaningful issue in Brazil as the upcoming presidential elections loom.

The system, which has over 175 million users, is now in the political spotlight, as a recent report from the United States Trade Representative Office (USTR) has raised concerns about the increased use of this network and its impact on private alternatives.

The report states that “industry representatives in the United States have expressed concern that the Central Bank favors Pix, which would disadvantage US providers of electronic payment services. Furthermore, the Central Bank requires financial institutions with more than 500,000 accounts to adopt the use of Pix.” Big credit giants, like Visa and Mastercard, would be pushing for measures to bring them to parity with Pix.