Central Bank of Brazil tightens Pix regulations and fintech licensing

The Central Bank of Brazil has announced regulatory changes to the Pix system aimed at enhancing security and expanding functionality. Key updates include the authorization of 'Pix Automático' for use in salary accounts starting in July 2027. Additionally, a hybrid billing system combining boletos and Pix QR codes will be introduced to prevent duplicate or incorrect payments, with new rules set to take effect in February next year.

The central bank is also implementing stricter oversight for financial institutions. New measures allow for the immediate suspension of entities undergoing extrajudicial liquidation and adjust timelines for the orderly exit of institutions that fail to meet minimum capital or equity requirements. This is intended to facilitate easier fund withdrawals for clients of failing institutions.

These regulatory shifts coincide with a significant increase in the rejection of license applications for fintechs. Between January and September, the Central Bank rejected 10 requests for Payment Institution (IP) licenses, more than doubling the previous year's figure. Analysts suggest this reflects a more cautious stance by the regulator following increased cyberattacks and fraud, leading to higher capital requirements and stricter governance standards for new market participants.