Brazil restricts pension funds from investing in cryptocurrencies: here’s why

Brazil has officially barred a major category of pension funds from investing in cryptocurrencies, citing risk concerns and the need to preserve long-term financial stability.

The country’s top financial policy body, the National Monetary Council (CMN), announced the decision under Resolution 5.202/2025, published last week.

The resolution prohibits Entidades Fechadas de Previdência Complementar (EFPCs)—which manage retirement savings for unionized and company-affiliated workers—from allocating any part of their guarantee reserves to digital assets such as Bitcoin (BTC).

The move signals a more conservative shift in Brazil’s approach to crypto-linked retirement planning as other countries begin cautiously experimenting with digital asset exposure in pension portfolios.

Crypto ban covers EFPC reserves

The Ministry of Finance confirmed in a notice distributed to the Brazilian media that EFPCs are now banned from allocating guarantee reserves to “virtual assets” such as cryptocurrencies.

These reserves are set aside to ensure that pension obligations can be met over time and are traditionally invested in less volatile assets like equities, fixed income securities, and government bonds.

According to the ministry’s explanation, crypto assets present “specific investment characteristics and associated risk” that make them unsuitable for the long-term, low-risk strategies that EFPCs are expected to follow.

The regulation applies only to closed pension entities and not to open pension funds or individual retirement products, which are supervised under different regulatory frameworks.

EFPCs in Brazil cater to tens of thousands of workers across public and private sectors.

Their guarantee reserves play a critical role in the country’s private retirement ecosystem, and regulators have increasingly scrutinised how these funds are managed amid global macroeconomic volatility and the rise of digital assets.

UK and US funds back Bitcoin

While Brazil is tightening restrictions, other nations are moving in the opposite direction. In the UK, for example, British pension consultancy Cartwright helped facilitate the country’s first pension-linked Bitcoin investment in 2023.

That fund allocated 3% of its assets to BTC, citing diversification benefits and long-term growth potential.

In the US, some state-level pension bodies have begun dipping into digital asset markets. Earlier this year, the Wisconsin State Investment Board disclosed a $340 million bitcoin investment via BlackRock’s spot BTC exchange-traded fund, IBIT.

Although federal caution remains in place in the US, states are increasingly acting independently to explore crypto-based instruments.

In Brazil’s case, the new resolution makes no mention of indirect investment vehicles like ETFs or tokenized platforms.

It remains unclear whether closed funds could gain exposure to digital assets via regulated intermediaries in the future, provided such investments are not linked directly to their guarantee reserves.

Indirect crypto exposure unclear

Resolution 5.202/2025 follows a broader risk-averse regulatory stance in Brazil when it comes to integrating crypto into mainstream financial systems.

Though the country has seen the growing adoption of digital assets, especially among retail users and fintech platforms, regulators have pushed back on the use of cryptocurrencies for institutional or critical financial infrastructure purposes.

This latest rule builds upon existing guidelines meant to protect retirement savings from volatile and speculative instruments.

However, it may raise questions about how Brazilian pension funds can remain competitive in the global landscape, particularly as international peers begin allocating small portions of their portfolios to digital assets.

The CMN has not provided a timeline for review or reassessment of the new restrictions, nor has it commented on whether similar policies will extend to other types of financial institutions.

For now, the resolution signals a clear line in the sand: Brazil’s closed pension funds will remain on the sidelines of the digital asset economy.

The post Brazil restricts pension funds from investing in cryptocurrencies: here's why appeared first on Invezz