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Has Brazil Invented the Future of Money?
- rbanffy 1y agoDidn’t get much traction before, but worth looking into: https://news.ycombinator.com/item?id=44645694 https://news.ycombinator.com/item?id=44645694
- soco 1y agoI don't get how a payment system - Pix or any other of the many similar others in the large world - is the future of money? For sure it's the future of payment systems, but what it is transacting is still plain old money, just in a faster way. I also don't see the advantages of a central bank stablecoin, wouldn't it be exactly the same as the actual currency? When I pay with Pix/Twint/BTPay I'm not handling printed notes either, so behind the scenes it could transact anything for all what I care - dollars, stablecoins, gold, potatoes...
- ourmandave 1y agoI had to look it up, and of course there's a Potato coin. About Potato Potato is a Revolutionary Meme token built on the Solana Network. Potato coin a dex build on solana, all fees go towards buying back and burning potatos https://coinmarketcap.com/currencies/potato/ https://coinmarketcap.com/currencies/potato/ Related, there's also Potato Rounds, which are crispy, thin-sliced, and oven baked, with a sprinkle of sea salt. https://recipeforperfection.com/olive-oil-and-sea-salt-oven-roasted-crispy-potato-rounds-recipe/ https://recipeforperfection.com/olive-oil-and-sea-salt-oven-...
- closewith 1y agoInstitutional faith in Pix has been rocked recently, as earlier this month, hackers using credentials purchased from a C&M employee were able to generate unauthorised PIX transactions on client banks and steal at least BRL$ 500 MM and maybe as much as BRL $ 5 BN. Although funds are already being recovered, it has highlighted the opacity of Pix security, which has flown somewhat under the radar due to the closed nature of the system.
- talles 1y agoThere are considerable privacy concerns regarding pix, some Brazilian government officials are able to obtain transaction information without a court order, which is needed when it comes to traditional methods that came before pix.
- closewith 1y agoYes, as commented elsewhere Brazilians in general are very accepting of government surveillance, with the omnipresent CPF and now complete disclosure of almost all consumer transactions to the State. It's always surprised me, TBH, given the very recent history of dictatorship and unbounded potential for abuse.
- mateusfreira 1y agoMost people don't think about that. Once they realise things change, Brazil also uses Bitcoin a lot because of a lack of trust. Pix would be even more widely used if the government took longer to start using it as a weapon (as it has already done)
- Qem 1y agoSource?
- Qem 1y agoIt was due to a contractor that sold his password for peanuts. Not much opacity here. They shoud stop relying on poorly paid outside contractors.
- closewith 1y agoYes, a developer for an upstream dependency sold their credentials and the attackers were able to use that to create transactions in client banks' Pix infrastructure. > Not much opacity here. I think a black box implemented by a third party that can steal your funds is the definition of opacity. > They shoud stop relying on poorly paid outside contractors. A great deal of financial software is written by poorly paid contractors, but it's rare that one set of credentials can introduce systematic risk to a financial system.
- man4 1y ago[dead]
- nottorp 1y agoThis is funny. Most of the "positive" attributes of the Brasilian Pix that are praised in the article are the same as for IBAN-to-IBAN ("wire") transfers in Europe. What does that have to do with any ---coins?
- lazide 1y agoAlso almost identical to Indian UPI.
- sschueller 1y agoIn Europe at least Switzerland instant IBAN to IBAN costs money. This is because they want to protect the similar payment service called TWINT which charges a high percentage to vendors and is owned by a group of banks. The conflict of interest is a huge issue. These middle men are not needed and their fees especially not. If I taxes pay for the SNB which is supposed to guarantee that payments can be made then they should also do that for digital transactions, not only cash.
- Youden 1y agoInstant IBAN to IBAN in Switzerland doesn't inherently cost money, the cost is just a cash grab by the banks. BEKB offers a free account with free instant transfers. Hypothekarbank Lenzburg offers free instant transfers on their standard paid account. Outside of Switzerland, instant SEPA transfers are typically free.
- zihotki 1y agoAccording to the regulations, https://www.ecb.europa.eu/paym/integration/retail/instant_payments/html/instant_payments_regulation.en.html https://www.ecb.europa.eu/paym/integration/retail/instant_pa... , equality of charges must be implemented before 9 January 2025 for member states and before 9 January 2027 for non-member states. And SEPA is a euro only. So conversion fees will apply for Switzerland. There is also another thing in the works based on SEPA instant payments - Wero ( https://wero-wallet.eu/ https://wero-wallet.eu/ ) but it will take some time to implement all functionality and roll it out.
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- monkeydust 1y agoReminded me of UK Faster Payments which I use frequently to send money around at zero cost and typically reaches destination in a minute at zero cost to either side. Only works with a dozen or so banks in the UK. https://www.hsbc.co.uk/current-accounts/what-is-faster-payments/ https://www.hsbc.co.uk/current-accounts/what-is-faster-payme...
- jl6 1y agoThose dozen banks cover about 99.99% of people who have a UK bank account, so in practice, sending money to other people in the UK is free and instant.
- andrewinardeer 1y agoAustralia too with PayID/Osko
- JimDabell 1y agoSingapore as well with PayNow. I think at this point, a lot of countries have free, instant bank transfers. It’s not the future of money, it’s the present of money.
- gsch1 1y agoIn Brazil, you can send money to individuals, businesses, government entities... essentially anyone with a bank account, and for free. And the transaction doesn’t take minutes, it takes seconds.
- grey-area 1y agoIt takes seconds in the uk too, a minute is just hedging as in some cases it could take longer but this is rare.
- closewith 1y agoRight, but only to a bank account with bank account details. You can't send money to a phone number, QR code (temporary or persistent), CPF, email address, etc. Pix isn't really comparable to SEPA Instant or Faster Payments, and the adoption rate shows it.
- exiguus 1y agoIf I understand it correctly, Pix is the same as digital euro [1]. No common bank account needed, just move digital money from one to another wallet from the federal bank. [1] https://www.ecb.europa.eu/euro/digital_euro/html/index.en.html https://www.ecb.europa.eu/euro/digital_euro/html/index.en.ht...
- niemandhier 1y agoThe digital euro could be a huge thing: 1. It would free the eu economy from the hidden “credit card tax” that goes to us companies. 2. It would create a base to finally make the availability of digital payments mandatory.
- Eddy_Viscosity2 1y agoIt naive to think that that digital currencies would somehow be free of fees, hidden or otherwise. Remember when streaming services were great because they offered an ad-free experience. Digital currencies will eventually have fees, and lots of them because they can be built-in and because people won't be given a choice. It will be a worse state than current credit cards.
- andrepd 1y agoApples to oranges. Digital Euro would be a public service maintained by the ECB, not a for-profit entity. Their interest is in maintaining transactions in the Eurozone as low friction as possible, not to bleed their customers dry after a monopolistic lock-in.
- Eddy_Viscosity2 1y agoI hope you are right, but public services are routinely hijacked by the wealthy and powerful. I'm not that optimistic.
- gilbetron 1y ago
- roenxi 1y agoKugman seems to be holding himself to a fairly low standard in this article for explaining himself - I can't figure out what he is trying to articulate unless he is trying to write an ironic headline. A key observation with blockchains is that the only thing they bring is the trust model. Otherwise, all their capabilities can be captured more efficiently with a database and a trusted central server. Brazil seems to have introduced a system with low transaction fees that Krugman likes. Ok. If it has no trusted central authority then it is something that you can just bring over to the US, today, and use and an exciting future may be incoming. The Fed getting involved and researching CBDCs wouldn't do very much. But he seems to be selling the central role of the Brazilian government is playing here so I don't think that is what is happening. If it has a centrally trusted institution then we've gone 50 or so years without discovering whatever this innovation is it which seems like it'd be bigger news than a blog post. The whole story here seems to be that Brazil has implemented something with marginally improved transaction costs in their financial system. That doesn't sound like a "future" to me; it sounds like the same technologies we've all known about for decades being used in ways we've known about for just as long. Whats the news in terms of novelty? Is he just saying he likes how Brazil manages their money? Why are CBDCs involved in this?
- asmnzxklopqw 1y agoSeems to me that this a story mostly about the very long settlement process that is specific to US, and less to the rest of the civilized world. Regarding the use of a digital currency, what Pix is missing, and what a cryptocurrency has, is the decentralization mechanism. All the ops are still controlled by a centralized entity, in this case the Brazilian Central Bank. Am I missing something?
- evrimoztamur 1y agoHello..? SEPA? IBAN-to-IBAN? iDEAL and many other integrated payment systems in Europe allowing instant C2B/B2C/B2B payments? We do not need crypto, the technology is here and implemented, and bank transfer fees are archaic rent-seeking structures. Well done Brazil, wake up America.
- Cthulhu_ 1y agoExactly, it's a solution looking for a solved problem. The digital banking you listed out-perform crypto as well, and have heaps of checks and balances, auditing, and guarantees from central banks. All that will need to be reinvented for "crypto" shit, and they need to show some proof as to why it's better before they get the billions of buy-in required.
- evrimoztamur 1y agoWell, I think crypto does solve a couple important problems faced by many speculative markets and casinos: Regulation and taxation. It's any scammer, grifter, and thief's paradise!
- jgalt212 1y agoTruth. I think the major reason Tether continues to exist is because the USG has that place wired.
- dandanua 1y agoIt's a paradise for all kinds of scum and dark people, like pedos, human traffickers, drug dealers, ransom hackers, mafias etc. And all this receives a great care from the current fascists USA government, who invested in crypto a lot, I suppose.
- cgag 1y agoI thought it was supposed to solve the problem of being kicked out of the banking system if you offend the wrong people?
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- dotcoma 1y ago> I can’t help noticing that Pix is actually achieving what cryptocurrency boosters claimed, falsely, to be able to deliver through the blockchain — low transaction costs and financial inclusion. Compare the 93 percent of Brazilians using Pix to the 2 percent, that’s right, 2 percent of Americans who used cryptocurrency to buy something or make a payment in 2024.
- mrkramer 1y agoTbh it's better that the state controls citizens' payment infrastructure than the private commercial banks.
- Cthulhu_ 1y agoA hybrid (as is happening today) is very feasible, that is, banks are subject to state laws, regulations and certifications. In turn, the state, through a central bank, offers them and their customers guarantees and warranties. If my bank goes under, €100K of my money is insured by the central bank for example.
- rbanffy 1y agoAnd if a Central Bank goes under, banking is the least of your concerns.
- _9ptr 1y agoI wouldn't be too sure about that.
- red-iron-pine 1y agoits a great idea as long as the state is benevolent. MAGA showed just how fast that can change...
- sMarsIntruder 1y agoKrugman’s touting Brazil’s Pix as money’s future — government-run, instant, and actually useful— while taking his usual “script” on crypto flops. Fair if you’re already in his camp on Bitcoin being BS, but just a quick recall his epic misses: - dismissing the internet as a fax-machine bubble back in ‘98 - his endless rants against stablecoins that keep proving him wrong.
- sMarsIntruder 1y agoI get it, you like nobel laureate even if they aren’t very sharp.
- kjksf 1y agoI would expect a Nobel prize winner, MIT and Princeton professor and New York Times contributor to be able to construct proper arguments not emotional outbursts: > Republicans say that they’re worried about invasion of privacy, that a CBDC would open the door to widespread government surveillance. But remember, these are the people who have handed over personal Medicaid data to ICE to facilitate arrests and abductions Instead of providing an argument for why CBDC is not invading privacy and enables government surveillance he goes for ad-hominem of "they're bad and don't care about what they say they care about". I don't need Republicans to care about privacy. CBDC would be a privacy and surveillance nightmare and if Republicans ban it, it's a good thing regardless of their motivations or thoughts. Imagine a giant bank, potentially mandatory for citizens, run by government. Today if government wants to look at your bank account and transactions they have to convince the judge to sign a warrant. With CBDC they'll just have this information, they'll control your ability to send money which is essential to modern living. We'll inevitably be one supermajority away from your ability to use money will vanish because you say something government doesn't like or call a politician fat. This is not future dystopia, this is today dystopia. In Canada during Covid protest the government gave itself emergency powers and shut down bank accounts of protesters. In Brazil the new government just made it criminal to do and share interviews with previous president. In Germany they're prosecuting someone for calling politician fat. Governments will abuse any power they get so it's best to give them as little power as possible. Politicians love it because they love every tool of control. I don't know why Krugman loves it but you should be against it. Sending money is not a problem and it doesn't need government to provide a "solution".
- jaybrendansmith 1y agoI think we should be equally afraid of government and banks. That's why allowing both would be better for everyone.
- dandanua 1y agoEvery government should have a tool to check if a transaction is illegal or not. In normal countries this should be done via a judge order if there are serious suspicions. This is how governments suppose to work. And there are checks and balances against power abuse, which were invented centuries ago. If a government doesn't work like that - then this is a problem of this specific government, not the laws. "All governments are bad" is a stupid idea, intentionally put onto the masses by the current US ruling party and their enablers (Musk), who are trying to seize all the power for themselves.
- akam4n4n 1y agoi was randomly going through top posts, had no idea this is by a nobel laureate. hn amazes always
- andrepd 1y agoKrugman had a long-standing opinion column. Always a pleasure to read, even though many capitalists don't like what he has to say.
- audinobs 1y ago"We need more communism!" - Standard well paid software engineer rails against the evils of capitalism
- owebmaster 1y ago"We need more capitalism!" - Standard laid off software engineer dreaming about finding a well paid job again
- lantry 1y ago"but you have an iphone" - standard bootlicker defends billionaires for free while they rob him blind
- andrepd 1y agoExceedingly insightful, gonna switch from reading Krugman's columns to reading your comments.
- rbanffy 1y agoThat was savage!
- p0w3n3d 1y agoPlease read Limes Inferior written by Andrzej Zajdel to learn what are Republicans and other right-winged afraid of.
- audinobs 1y agoIf you value privacy, it is hard to see how someone can be against "green pieces of paper bearing pictures of dead presidents".
- red-iron-pine 1y agothe argument then goes to the fallacies of fiat currency, or the implications of the fact that said paper may soon have pictures of a live president on it
- rbanffy 1y ago> may soon have pictures of a live president on it Hopefully not for long.
- rbanffy 1y agoJust to clarify the comment the next time I am stopped at an American airport, this means the term lasts for four years, that he can't run again, and that his successor would remove that inappropriate image as soon as they could. Personality cults are not a healthy thing in a democracy.
- man4 1y ago[dead]
- sMarsIntruder 1y agoDownvoted by people who don’t value privacy :)
- rbanffy 1y agoWake me up when you carry your phone in a Faraday cage. Also, stop participating in any social networks.
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- jacknews 1y agoJust looking down from Cambodia...
- namaku0 1y ago[dead]
- namaku0 1y ago[dead]
- tanduv 1y agoVery cool, reminds me of India's UPI system
- mateusfreira 1y agoPix has become virtually liquid cash here in Brazil. We use it for everything from tipping a waiter to buying an apartment or house in seconds. Before the release, when I read about the system, I was skeptical, but after its release (approximately 5 years ago), it has worked seamlessly, and adoption is now nearly 100% across the economy.
- bitlax 1y ago> Republicans say that they’re worried about invasion of privacy, that a CBDC would open the door to widespread government surveillance. But remember, these are the people who have handed over personal Medicaid data to ICE to facilitate arrests and abductions. If you think they’re deeply concerned about potential surveillance, I have some Trump family memecoins you might want to buy. I know it seems like he's insulting Republicans here, but it's clear Krugman thinks so little of his readers.
- alexgieg 1y agoThere's a huge error in the article. It says Pix doesn't lead to kidnapping and torture. It absolutely does. Kidnapping people then forcing them to unlock their phones to make a Pix to the kidnapper is such a huge problem here in Brazil that banks have instituted layers upon layers of safety measures, such as reduced nightly transfer limits, different limits on whether you're sending money to someone you know vs someone you never sent money before vs businesses etc. So if a criminal sees you have a lot of money they keep you kidnapped for days until you transfer everything a piece a day. And their colleagues then withdraw the values or transfer them through several accounts, making it impossible to recover. Part of that also involves forcing the kidnapped person to make all the loans their banks provide them, conveniently easy to do in the same app you use to make a Pix, and then send them the money. Due to that we also have insurance specifically covering forced Pix transfers, but with limits above which the bank isn't responsible. Some people defend themselves via alternative means. I myself, for example, keep a cheap phone exclusively for bank transactions at home, never installing the app on my main phone I carry with me. Which I also keep rooted, as that prevents baking apps from being installed (they refuse to run). Oh! And there's fraud to in the form of replacing the fraudster's QR code for a business's, without the business noticing, so payments go to the wrong account. And recently the government has started threatening big businesses that fail obeying arbitrary pressure due to this or the political reason with suspension from the Pix system, which due to how much it's used would severely cripple them as they'd lost tons of customers who have neither debit nor credits cards, so those businesses end up obeying. So there's that too. TL;DR: Pix doesn't really solve those safety aspects the author talks about. But other than that, yes, it's extremely convenient and functional.
- nicholasbraker 1y agoThe first line is straight out of the Hitchhikers Guide to the Galaxy in the same vein as "In the beginning the universe was created. This made a lot of people angry and has widely been considered as a bad move." Love it!
- tim333 1y agoCentral bank digital currencies are an odd idea that lots of people have talked about but not implemented as they don't really make a lot of sense. It started because things like bitcoin and tether got a lot of traction as mostly unregulated cryptocurrencies and governments thought why have these criminimal using tether - we can issue a government crypto instead. But it doesn't really make sense - if you are going to use something regulated by the government why not just put your money in a bank account and drop the blockchain stuff?