- Brazil’s National Monetary Council has prohibited closed pension funds (EFPCs) from investing in cryptocurrencies due to high-risk concerns
- The ruling applies exclusively to EFPCs and does not affect open pension funds or individual retirement products
- This decision aligns with Brazil’s cautious approach to integrating digital assets into its financial system, prioritizing the protection of retirement savings
Brazil’s top financial policy authority, the National Monetary Council (CMN), has barred closed pension funds from allocating investments into cryptocurrencies like Bitcoin. The policy, enacted through Resolution 5.202/2025, prevents these funds, known as Entidades Fechadas de Previdência Complementar (EFPCs), from adding digital assets to their mix due to the growing concerns about their volatility and speculative nature. This volatility is the reason why pension funds globally are not yet attracted to cryptocurrencies and are largely steering clear of it.
Crypto Not Welcome in Conservative Funds
Resolution 5.202/2025 specifically targets EFPCs, which manage retirement savings for union members and corporate employees. These funds traditionally invest in more stable assets such as bonds and stocks to ensure the security of their beneficiaries’ pensions, which explains why Brazil’s Ministry of Finance blocked the addition of digital assets.
The ministry emphasized that cryptocurrencies possess “specific investment characteristics and associated risk” that render them unsuitable for the conservative investment strategies typically employed by these pension funds. Bitcoin’s price performance across its 16 year history underlines why this decision has been reached, as no pensioner wants to see their pot drop in value by 50% over a matter of months.
Signs That Times Are Changing
While Brazil adopts a restrictive stance, other countries are exploring the inclusion of digital assets in pension portfolios. In the United Kingdom, for example, certain pension funds have allocated a portion of their assets to Bitcoin, citing diversification benefits and long-term growth potential. However, when an unnamed pension fund revealed that it had allocated 3% of its holdings to Bitcoin, this was dubbed “irresponsible and reckless” by wealth managers.
Similarly, some U.S. state-level pension bodies have begun investing in digital assets, reflecting a more open approach to cryptocurrency integration within retirement planning, especially with the Trump administration pushing cryptocurrencies.
Given the importance of stability in their fund makeup, we can expect pensions to be one of the last sectors to begin dabbling in cryptocurrencies.
