Regulatory Decision by the National Monetary Council
Brazil’s leading financial regulatory body has taken a significant step by prohibiting certain pension funds from venturing into the world of cryptocurrencies. The National Monetary Council (CMN) has mandated that closed pension entities, known as Entidades Fechadas de Previdência Complementar (EFPCs), must not allocate any part of their guarantee reserves to bitcoin (BTC) or other digital currencies due to their high-risk nature.
The Role of EFPCs in Brazilian Retirement Savings
EFPCs are responsible for managing retirement savings for a diverse group of workers, including those employed in unions and various companies. Traditionally, these pension funds maintain their reserves primarily in safer investment vehicles such as bonds and equities, ensuring stability and security for their members.
Details of the Prohibition
A notice from the Ministry of Finance, which has been circulating among local news outlets, emphasizes that the resolution aims to safeguard the financial health of these pension funds. The notice states, “The resolution also prohibits investments in virtual assets, considering their specific investment characteristics and associated risk.” This ruling was officially published last week under Resolution 5.202/2025 by the CMN.
International Perspectives on Pension Fund Investments in Crypto
In stark contrast to Brazil’s regulatory stance, other countries are exploring the integration of cryptocurrencies into their pension systems. For instance, last year, a British pension specialist, Cartwright, successfully guided the first pension fund in the UK to allocate 3% of its assets to bitcoin. Additionally, several U.S. states have started to experiment with crypto investments in their pension funds, despite cautious federal oversight. Notably, Wisconsin’s state investment board disclosed in February that it had invested $340 million in bitcoin via BlackRock’s ETF (IBIT).
Scope of the Ruling
It’s important to note that this ruling specifically targets closed pension funds and does not extend to open pension funds or individual retirement products offered by banks and insurers. These entities are regulated differently and may still permit indirect investments through exchange-traded funds or platforms that tokenize assets. This distinction allows for some flexibility in the investment strategies of open pension funds while maintaining a protective stance for the closed pension entities.
