Pix was launched last year, but according to information from O Globo, there is a possibility that the system will halt operations due to political issues involving the public budget. With rapid adoption by users, the system allows transfers between different banking institutions in real time, and without fees for individuals.

The concern surrounding the possible shutdown of Pix revolves around the approval of the federal budget in the National Congress. Current expenses have left out a series of expenses, including part of the expenses planned for the Central Bank, which operates the system.

What is the Union budget?

Every year, the Executive Branch must send to the National Congress a sort of exhaustive list of planned expenditures for all its operations, such as health, education, security, infrastructure, technology and others. These amounts must take into account the spending cap, which is defined by law and exists to curb public debt.

It turns out that it is almost always a challenge to “stay in the black”, which is why some areas often suffer spending cuts compared to the previous year. Breaking this ceiling is a major political risk, since it can simply lead to the budget being rejected, or worse: being classified as an act of administrative impropriety, which, for example, is an accepted argument for opening impeachment proceedings.

With that in mind, the Central Bank was left with the burden when it came time to close the accounts. The public institution had the money earmarked for its technology area zeroed out in the budget forecast. According to O Globo, the government is trying to maneuver to include expenses that were left out of the budget in a PEC (Proposed Constitutional Amendment). This would create a surplus that, from a political and constitutional point of view, would not represent any infraction.

Pix depends on the BC, not on banks

Unlike the DOC and TED systems, which are operated by the banking institutions themselves, Pix is ​​a new feature that depends on the Central Bank. It is the famous Bacen that provides the infrastructure and technology for the agile and uncomplicated transfer system.

The launch of Pix is ​​also part of the institution's modernization project, and it wouldn't look good if, less than a year after its launch, its operation were halted due to budget constraints. On air since November 2020, the system has already gained important new features such as integration with e-commerce platforms and transfer via phonebook contacts.

Budget is not the only source of funding for Pix

Even though it operates at the Central Bank and is free for individuals, banks and fintechs bear some costs to bring the innovative tool to their customers. It doesn't seem like much: R$0,01 paid to the Central Bank every ten Pix transactions.

While it is known that the platform is already the most popular payment method in the country, the costs involved in Pix's maintenance and infrastructure are unknown. Even so, some public data reveal that, for example, in February 275.324.454 transactions were carried out through this system. With the information available, we would then have a monthly transfer from banks to the Central Bank in the order of R$275 thousand if the behavior of two months ago represents the average volume of monthly transactions.

Pix shutdown is unlikely

Even with the uncertainties surrounding the maintenance of Pix, Cointelegraph obtained information from a source linked to the BC. For her, the possibility of the BC paralyzing Pix because of the Union's budget is unlikely.

The anonymous source claims that “a large part of its cost is subsidized by payment initiators,” that is, banks. Therefore, many data lead us to believe that even with the budget issues, there will be no shutdown in Pix.

Central Bank Position

We asked the Central Bank for a position on the budget for the Pix system. We asked the following questions:

• Could the Central Bank run out of resources to run Pix due to the budget that was approved?
• If so, how long would the Pix system have resources to run?
• What is Bacen doing, or does it already know will be done, to solve the problem?

In response, Bacen reported that “the impacts on the Central Bank’s budget will be managed so as not to harm Pix and its evolutionary agenda.” In other words, everything suggests that there is no risk of the platform going offline.

Image: Tim Samuel/Pexels/CC