Brazil Just Banned Pension Funds from Buying Crypto—Why?

Imagine retiring after decades of work, only to find out that your pension fund bought Bitcoin—and lost.

That’s what Brazil’s government is attempting to avoid.

In a dramatic turn of events, the National Monetary Council (CMN) has officially banned closed pension funds from investing in cryptocurrencies.

The CMN held financial losses together with market instability and regulatory uncertainties as the main causes for banning cryptocurrency investments.

The United States, together with the United Kingdom, is carefully evaluating the potential addition of crypto investments to pension funds. Brazil chose protective measures even though it could experience future growth.

Closed pension schemes—that protect retirement savings of millions of employees—are now restricted to more traditional assets like bonds, shares, and real estate.

Curiously, the ban does not extend to individual retirement arrangements or open pension schemes, leaving a small window for future exposure to crypto through regulated intermediaries.Its advocates greet it as a reasonable measure to protect at-risk retirees.

Its critics attack it as a lost chance to diversify and create pension riches.

Is Brazil playing it safe—or falling behind the finance revolution?