Key facts
- Senator Flavio Bolsonaro proposed preventing Brazil's Pix system from connecting with non-Western payment networks.
- The proposal aims to address U.S. concerns that Pix could reduce reliance on the U.S. dollar and bypass intermediaries.
- Bolsonaro submitted his proposal to the U.S. Trade Representative (USTR) office.
- The USTR is considering imposing tariffs on Brazilian goods, with a decision expected this month.
- President Luiz Inacio Lula da Silva opposed Bolsonaro's suggestion, calling it an attempt to cede control of Pix.
Senator Flavio Bolsonaro has proposed preventing Brazil's popular instant payment system, Pix, from integrating with non-Western cross-border settlement systems. This move, presented to the U.S. Trade Representative (USTR) office, aims to alleviate U.S. concerns that Pix could diminish the role of the U.S. dollar and bypass traditional financial intermediaries, potentially averting U.S. tariffs on Brazilian goods. The USTR has been investigating Pix for potentially unfair trade practices, with a decision on tariffs expected this month.
President Luiz Inacio Lula da Silva criticized Bolsonaro's proposal, describing it as an attempt to surrender control of Pix to foreign interests and asserting that the system is a Brazilian achievement that will not be relinquished. Bolsonaro, in turn, argued that tariffs would be an inappropriate response, suggesting that legislation to ensure Pix's separation from non-Western settlement arrangements would be a more effective signal to Washington. He also urged the U.S. not to impose tariffs, noting that the dispute has inadvertently boosted Lula's popularity.
Launched in late 2020, Pix has rapidly become Brazil's dominant payment method, surpassing credit and debit cards and significantly reducing cash usage in Latin America's largest economy.