Fintech Chronicles: Brazil’s PIX, US Innovations, and Future Trends
Imagine a comparable Financial Engineering moment as the `Chopstick Manoeuver`!
Emerging Markets Fintech Innovations — Brazil pioneers
Two of most popular DPIs — Digital Public Infrastructure- are undoubtedly UPI and PIX.
UPI was designed with the objective to integrate government services digitally and create the India stack with Aadhar and the likes.
PIX has a different objective and as a result PIX is designed for programmable money and UPI isn’t.
The Brazilian Central banks wanted from the start to design a system that digitally interacts with programmable money. For now, the fraction of the payments in Brazil that are programmed is small, but the vision is to increase it. Currently, in Brazil through the PIX app one can get cashbacks, a capability that is only possible because of the baked in programmability.
Soon the PIX rails will allow every cash registry in any store, in any village where there is no bank or no ATM, to be able to perform banking services starting in 2026. This has a major economic and social impact, as there are over 1000 cities in Brazil that have no banks and no ATMS. It is a functionality that can scale only because PIX is designed natively to be programmable.
And while we have all seen the amazing adoption of PIX, what hasn’t been discussed widely is that at the same time Banks have increased substantially the number of users and the number of transactions. The Central Bank believes that their long-term plan which includes a CDBC — Drex — and an economy that will be largely tokenized, will further benefit the banks.
Insights from a conversation with the President of the Central Bank of Brazil — Roberto Campos Neto at the Markus’ Academy . Stay tuned for more
Newly introduced delightful innovations — US focused
The future is here! Our assets will be 100% invested at all times! [1]
“Earn until you spend” by WisdomTree bridges saving, investing, and spending. The consumer is king.
The latest innovation is the introduction of a new Digital MMF — the WisdomTree Government Money Market Digital Fund (WTGXX) — that allows users to “earn until you spend”. WTGXX investors earn income (current 7-day yield of 4.60%) until the WTGXX shares are sold to fund spending with the VISA debit card.
Wisdom Prime is a US app for WisdomTree crypto investments. It offers Bitcoin and Ethereum, a Gold Token, and several Digital Tokenized funds. The app also has a Visa debit card. Baby steps towards a Future in which not only what qualifies as an `Asset` will be much broader than the traditional and current alternative asset classes, but these Assets will be fully invested.
Futuristic scenarios combined
`When I spent a lot of time with Alibaba and Alipay looking at why they’ve become so successful in China, what I realized was they throw away their systems every 3 or 4 years and refresh them` said Chris Skinner in conversation with me (The Future of Finance: From Digital to Intelligent) That was before Github Copilot, Replit and the likes.
`I have a theory around that, you might have a bank that will be sort of self healing. So let’s say you have an API that you use for some kind of open banking thing and the API changed, this AI might rewrite the API so that it’s up to date or it could see a core system in trouble and it would do some corrective actions semi-autonomously or it could say, I think this is a problem` said Daragh Morrissey, Director of AI at Microsoft Worldwide Financial Services in conversation with me (Demystifying GenAI Deployment in Banking)
Once tech capabilities improve (for example, AI agents for context-aware programming [2] ) Western neobanks and maybe some incumbents will be able to practice what Alibaba did. Replacing core banking systems will become the new black in the Agentic AI era, especially for the challenger banks that have built their own core banking systems (e.g. Starling, Revolut, Monzo, Bunq).
API maintenance and API monitoring will become a piece of cake. This would be a major blessing for Open Finance.
[1] Extract from `Money in the Metaverse` by David Birch and Victoria Richardson but actually a quote by Matt Harris.
[2] How AI Agents Are Revolutionizing Context-Aware Programming
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