José Luis Oreiro: "Pix demonstrates that Brazil surpasses the US and Europe in innovation"

247 - In interview with the program good night 247Economist and professor at the University of Brasília, José Luis Oreiro, assessed the Pix instant payment system as one of the greatest demonstrations of Brazil's superiority in technological innovation in the financial area, surpassing even the United States and European countries. The statement was made amidst international debates about Pix's influence on the global stage, following praise from Nobel Prize-winning economist Paul Krugman.

“Krugman kind of reinvented the wheel,” Oreiro stated. “Anyone who knows even the United States and the European Union at all knows that our financial system is far more advanced in terms of payment technology than those in the United States and Europe.”

Robust system by necessity

Oreiro recalled that Brazil's progress in the sector was due to structural and historical factors. "It was because Brazil experienced high inflation, almost hyperinflation, in the 80s, that we developed a highly advanced payment system, because we needed to have it. Necessity became a virtue," he explained.

In comparison to the American response to the Covid-19 crisis, Oreiro was direct in criticizing what he called the "primitivism" of the payment methods used in the US: "People received a check at home by mail that they had to go to the bank to cash. That is, imagine a situation where you can't leave your house because of a virus and you still have to go to the bank to access your emergency income."

Financial inclusion and social functionality

Oreiro also highlighted Pix's role in democratizing access to banking. “Roberto Campos Neto [...] identified a problem in Brazil, which was the lack of access to banking services [...] and they created a 24-hour instant payment system, which is Pix.” According to him, the system is so widespread that “in Brasília, people who ask for money at traffic lights ask for Pix. You don't need to give them coins.”

The professor also highlighted the economic impacts that Pix has on American companies: "Visa and Mastercard [...] are losing market share in Brazil because of Pix. So this fits within the broader context of the decline of the United States as a superpower."

Cryptocurrencies and the role of the State

Oreiro refuted any comparison between Pix and cryptocurrencies, classifying the latter as speculative instruments without social value. “Currency is what the State defines as a unit of account for contracts and price lists. [...] Cryptocurrency is not currency. First, it is not a unit of account. Second, it is not a means of payment.”

He also criticized libertarian arguments in defense of cryptocurrencies. "Those who use cryptocurrency, the nicest ones are evading income tax. The most evil ones are pedophiles, arms traffickers, human traffickers, and terrorists."

Furthermore, he pointed out the high environmental cost of cryptocurrency mining: “You are contributing to global warming to produce an asset whose social value is negative. That is the definition of irrationality.”

Pix as an institutional achievement

In concluding his analysis, Oreiro reinforced the legitimacy of Pix as a currency accepted and regulated by the State: “Pix is ​​an effectively recognized means of payment. [...] It does not conceal transactions. [...] Currency is a creation of the State. It's even in the Bible.”

He also mocked American resistance to Brazilian progress: "The Americans can't handle the fact that they are a declining power. It's that simple." Watch: