Key Pension Funds Prohibited from Making Crypto Investments in Brazil, Citing High Risk
Key Takeaways:
- Closed pension funds (EFPCs) in Brazil are now barred from investing reserves in cryptocurrencies, according to the National Monetary Council.
- The regulation aims to protect retirees’ savings and ensure system stability, citing extreme volatility and high risk.
- The move comes amid increasing scrutiny by global regulators of institutional involvement in crypto, which is a stark contrast to some of the approaches taken in the UK and US.
Brazil’s National Monetary Council (CMN), the country’s top financial regulator, has imposed a strict ban on certain pension funds investing in cryptocurrencies. The measure applies directly to closed supplementary pension funds, or Entidades Fechadas de Previdência Complementar (EFPCs) as they are referred to locally, prohibiting the investments of such funds’ guarantee reserves in Bitcoin (BTC) or any digital assets.
The ruling reinforces Brazil’s cautious stance on cryptocurrency regulation, especially regarding institutional funds. The official ruling was issued under Resolution 5.202/2025.
Brazil’s Aim: Protect Retiree Savings from Market Volatility
The CMN’s directive is driven by concerns over extreme volatility and associated risks in the crypto markets. Financial authorities were concerned about the risk of exposing EFPC retirement savings to volatile assets. These funds — which typically keep reserves in relatively stable instruments like bonds and equities — are regarded as being uniquely susceptible to the extreme price volatility that is a hallmark of cryptocurrencies.
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