Brazil Blocks Crypto Investments for Retirement Funds

In a new development, Brazil’s top financial authority, the National Monetary Council (CMN), has ruled that certain pension funds can no longer invest in Bitcoin (BTC) or other cryptocurrencies. The government believes these investments are too risky for retirement savings.  

The decision, published under Resolution 5.202/2025, affects closed pension funds, also known as Entidades Fechadas de Previdência Complementar (EFPCs). These funds manage retirement savings for thousands of workers, including those in unions and private companies.  

Why Did Brazil Ban Pension Funds from Holding Bitcoin?  

Pension funds rely on safe and stable investments to ensure that retirees receive their money in the future. Typically, they invest in bonds and stocks, which are seen as more secure than cryptocurrencies.  

Bitcoin and other digital assets are known for their price volatility, and their market value is not predicated. The Brazilian government fears that allowing pension funds to invest in crypto could put retirement savings at risk. 

The CMN has completely banned these funds from buying Bitcoin or other virtual assets to prevent possible losses. 

The Ministry of Finance confirmed the ban in an official statement. The ministry reiterated that crypto investments have unique risks that make them unsuitable for pension funds.  

Other Countries Are Taking a Different Approach  

While Brazil restricts crypto investments for pension funds, some countries embrace them. In the United Kingdom, pension specialist Cartwright helped a pension fund invest 3% of its assets in Bitcoin last year. 

Similarly, several states in the U.S. are exploring crypto investments for their pension funds. In October 2024, Florida’s chief financial officer, Jimmy Patronis, urged the agency overseeing the state’s retirement funds to explore Bitcoin investments. 

He asserted that the asset’s reputation as “digital gold” could offer a strategic hedge against the volatility of traditional asset classes. 

In February, Wisconsin’s state investment board joined the growing trend,  revealing it had invested $340 million in Bitcoin through BlackRock’s IBIT ETF. These moves show that some financial experts see Bitcoin as a valuable long-term investment despite its risks.  

Other Pension Funds In Brazil May Still Invest in Bitcoin 

The CMN clarified that the ban only applies to closed pension funds (EFPCs). Open pension funds and individual retirement accounts offered by banks and insurance companies may still indirectly invest in crypto. 

The financial agency revealed that crypto investments can be made through exchange-traded funds (ETFs) or tokenized assets. These products allow investors to gain exposure to Bitcoin without directly holding it.  

While many in the crypto industry may see this as a setback, the Brazilian government is making it clear that it prioritizes financial security over high-risk investments, especially when it comes to people’s retirement savings.