After declaring that it was closely following the launch of Ethereum Code by WhatsApp, the Central Bank of Brazil ordered the companies supporting the launch of Facebook to stop supporting it.
The information was shared by the Central Bank of Brazil with Cointelegraph.
If the companies do not comply with the determination, they are subject to a fine from the Central Bank.
„As part of its obligations as a regulator and supervisor of payment arrangements in Brazil, the Central Bank (CB) has determined that Visa and Mastercard should suspend the commencement of activities or immediately cease the use of WhatsApp for payments and transfers under the agreements established by these supervised entities.
According to the Central Bank of Brazil the reason is to preserve a competitive environment.
„The Central Bank’s motivation for the decision is to preserve an adequate competitive environment, which guarantees the operation of an interoperable, fast, safe, transparent, open and cheap payment system“.
WhatsApp makes changes in Brazil and now allows to send and receive money through the application
Still, according to the Central Bank, the measure will allow the Central Bank to assess the risks of implementation.
„It will allow the Central Bank to assess the possible risks to the proper functioning of the Brazilian Payments System (SPB) and to verify compliance with the principles and rules set forth in Law No. 12.865 of 2013“.
The Central Bank will evaluate
The Central Bank also pointed out that the operation of payments through WhatsApp may generate irreparable damage in the Brazilian payment system.
„The eventual start or continuity of operations without a previous analysis by the Regulator could generate irreparable damage to the SPB, especially in terms of competition, efficiency and data privacy“.
If companies do not comply with the determination, they will be punished.
„Failure to comply with the determination of the Central Bank will subject the interested parties to the payment of a punitive fine and to the determination of responsibility in an administrative sanctioning process“.
Cointelegraph sought out Facebook to comment on the ban but has yet to receive a response.
On Monday (June 15) Facebook announced the launch of Facebook Pay in Brazil to enable payments through WhatsApp.
With the novelty, users could send and receive money, as well as pay bills and make purchases through the application.
Brazil was the country chosen to launch the payment and money transfer service called Facebook Pay.
In addition to commercial accounts using the application, the functionality will also be available to individuals.
Therefore, it would be possible to send and receive money between friends, without paying any fee for it.
However, for business accounts there will be a fixed fee for payments received by Facebook Pay.