Brazil’s central bank chief Roberto Campos Neto on Friday said he believes credit cards will cease to exist soon due to the growth of the open finance system, through which clients authorize financial data sharing with different institutions.
Open finance is a central bank project that has been implemented in phases since 2021.
Speaking at an event about cryptocurrencies, Campos Neto projected that, through the system, users will control all aspects of their financial life in one “integrator” on their mobile, rather than having many apps from different banks.
This will allow the development of cash management products for individuals and users to choose between making payments with the Pix instant payment system by debit or credit, he added.
“This system eliminates the need to have a credit card. I think that credit cards will cease to exist at some point soon,” said Campos Neto, noting that banks have already started using Pix to offer credit.
Launched by policymakers in 2020, Pix allows real-time transfers and payments and has been widely adopted by Brazilians, already surpassing the volume of credit and debit card transactions in the country.
According to Campos Neto, Pix could first expand “at least” to Latin America. He said Canada has also shown interest in the system.
During the event, Campos Neto said he disagreed with heavy regulation of crypto assets, but stressed concerns on custody concentration, since four companies currently hold 80 per cent of crypto assets.
He also said he was concerned about the risk of transaction concentration, with “one or two platforms holding 20-30 per cent of the market.”
According to the central bank chief, regulators in Brazil want to ensure cryptocurrencies have transparency in how they are traded, created and transacted.