Brazil's government-run payments system has become dominant

Pix revolutionised the way we transact in Brazil. I've used Pix to pay for things that cost only cents, and I have a friend who bought her house using Pix. The system just works for any transfer amount. And it's so easy to use.

Its speed is truly baffling, and so is its reliability. Never have I failed to make a Pix payment because of downtime. I never cease to be amazed by how fast money arrives in my Brazilian account when I make a withdrawal directly from my EUR wallet on Wise. I receive a push notification from my Brazilian bank before Wise finishes running the animation of confirmation of withdrawal. It's like magic.

And it's so widespread that nowadays I don't even question whether someone accepts Pix. When I get in a taxi, no matter how old the driver is, it's certain that they take (and prefer) Pix.

I've even had homeless people ask me for Pix instead of change on multiple occasions.

Cryptocurrencies don't stand a chance.

Now, try to use Pix outside of Brazil - it's not even used in other Mercosur countries, what's the chance of having that adopted in other countries... And, that's problem #1.

How much do you trust your government with your money? A system like Pix don't stand a chance to get a worldwide adoption - maybe people are naive but governments won't unify to adopt a common system controlled by just a single entity / country.

What we may however end up with, are dozens of systems like Pix, one for each country, union, etc. Still cryptocurrencies as-is remain relevant (see point 1)

Cryptocurrencies will likely never go away, and will remain in use for certain use cases from a cross border value transfer perspective, similar to gold; either the token moves or the ownership is updated. More interesting is offering digital wallets for a single or basket of currencies to anyone you can remotely identity proof in the world (similar to nsave [3]).

[1] https://www.volt.io/real-time-payments-world-map/

[2] https://www.bis.org/about/bisih/topics/fmis/nexus.htm

[3] https://www.nsave.com/ | https://www.ycombinator.com/companies/nsave

No one pays FX fees on each transfer. Single large rebalancing transfers allows them to actually move money at optimal times and rates with bulk discounts. Then they can currency hedge and get larger spreads on the actual fx rate.

My assumption was that it usually comes down to finding someone else with money in both currencies (i.e. a large bank or government) and exchanging one for the other. Of course that's unsatisfying: it's not just turtles all the way down.

Ultimately if I'm running out of, say, USD, and have a lot of CAD, I have to to buy a bunch of something for CAD and sell it in USD. If you wanted a "zero banking" currency transaction I guess the way to do it is to park on the Canadian side of the border, buy imports to the US, walk across to the US, and sell them.

Or maybe there's a magic money shredding / printing machine that I didn't know about. I guess an international treaty could actually authorize such a thing.

It should be satisfying in the following sense - the financial system is nowhere near as complicated as it seems. There is no magic. If you find yourself feeling like there is some magic somewhere, just ask another question because there is likely just a word or a layer of indirection that is making something quite simple seem mysterious.

But yeah, it's mostly just market forces that keep things stabilized, it seems.

[1]: https://www.cfr.org/tracker/central-bank-currency-swaps-trac...