In a recent column, Paul Krugman marvels at Brazil’s Pix system, a government-run digital payment network that has rapidly overtaken other non-cash methods in the country. He uses Pix to mock opponents of central bank digital currencies (CBDCs) and to scorn the supposed failure of cryptocurrency to deliver on its promises. But in doing so, Krugman misses nearly everything that matters about crypto — and about liberty itself.
Let’s start with the core of Krugman’s argument: Brazil built a fast, cheap, and accessible public payment system, so the US should do the same. He frames Pix as a superior version of Zelle, made better by the fact that it’s run by the central bank. And since 93 percent of Brazilians have used Pix, he takes that as proof that public systems outperform private ones and that government-run digital money is the future.
But then comes a misleading comparison. Krugman contrasts Brazil’s 93 percent Pix usage with the two percent of Americans who used crypto for payments in 2024, using that gap to declare crypto a failure. This is a textbook apples-to-oranges fallacy, and it betrays a deeper misunderstanding of what crypto is even trying to do.
Bitcoin was never designed to replace fiat in a world where fiat is propped up by legal tender laws, enforced monopolies, and taxpayer-subsidized infrastructure. Of course people in Brazil use Pix more than Bitcoin — just like they use Brazilian Reais (R$) more than gold. Popularity under state compulsion is not the same as voluntary preference. Adoption tells us little about legitimacy when one option is legally mandatory and the others are actively discouraged or shut out.
Krugman also blurs the lines between stablecoins, CBDCs, and cryptocurrencies as if they’re all interchangeable. But this conflation is lazy at best. A stablecoin like USDC, backed by private institutions and used voluntarily, is not the same as a state-issued CBDC that can be surveilled, censored, or politically weaponized. And none of these is equivalent to Pix, a government-owned retail payment system built on top of an existing fiat monopoly. Comparing Bitcoin to Pix is like comparing gold to Venmo. They solve completely different problems and are not competing on the same terms.
Krugman seems to think that because Pix is easy to use, it has solved the very problem crypto was meant to address. That’s like saying the DMV solved the transportation problem because it issues driver’s licenses quickly. What crypto offers is something fundamentally different: the ability to opt out of systems controlled by the state. That means privacy. That means financial sovereignty. That means not needing a government.
In fact, the very success of Pix reveals the danger Krugman refuses to acknowledge. When a government controls not only the money supply but also the rails for all digital payments, you have a monopoly in both the asset and its transmission. That’s absolute power — and it’s incompatible with individual liberty.
Brazil is already showing what this can look like.
In 2020, WhatsApp — used by virtually everyone in the country — attempted to launch its own payment system. It was blocked by the central bank. Not because it posed a risk to consumers, but because it competed with Pix. This is not innovation. It’s protectionism dressed in state robes. How can a private company possibly compete with a system the government both operates and regulates?
Krugman waves off fears of surveillance by assuring readers: “If we ever do create a CBDC, it will surely involve comparable privacy protection. Either you trust in rule of law or you don’t.” But history and economics tell us that power tends to expand until something stops it. Giving the state even more centralized control over money, payments, and financial infrastructure is not progress. It’s regression into a system where every transaction can potentially be tracked, every dissenter can be punished, and every private alternative can be crushed.
And let’s be clear: this isn’t a partisan concern. It’s a structural one. Once the infrastructure is in place, it doesn’t matter which party is in charge, what matters is that the government can now monitor, freeze, or block your financial life at the flip of a switch.
Ironically, Krugman’s celebration of Pix and dismissal of crypto will likely do the opposite of what he intends. As more people realize the extent of government control over fiat rails, the demand for alternatives will only grow. Pix doesn’t kill crypto — it vindicates it. Despite much less developed capital markets, Brazil got its first bitcoin ETF before the US, and it also has access to an altcoin ETF, which the SEC has blocked twice.
Krugman seems stuck in a worldview where all money must be politically managed, where value comes from government authority, and where freedom is something granted, not assumed. But the core idea behind crypto — especially Bitcoin — is not low transaction fees or financial inclusion, as Krugman narrowly defines it. The real innovation is the creation of a monetary system that no one controls, and no one can shut down.
Bitcoin’s strength lies in its incorruptibility. Its rules are enforced not by men but by math — by cryptographic guarantees, not political compromise. It offers what no CBDC ever will: monetary and financial freedom backed not by laws, but by code.
And yes, maybe only two percent of Americans used crypto for payments in 2024. But that’s beside the point. Bitcoin thrives where it’s needed most: among Venezuelans escaping hyperinflation, Ukrainians fleeing invasion, and Nigerians bypassing capital controls. It gains value where the system fails, and that is precisely what makes it valuable.
Paul Krugman sees Pix as the future of money. But what he’s really celebrating is the future of state control. For those of us who value liberty, privacy, and competition, that’s no future at all.