Brazil Bans Retirement Funds From Investing in Cryptocurrency
Sergio Goschenko
Brazil Bans Retirement Funds From Investing in Cryptocurrency
The National Monetary Council, one of the major institutions managing monetary system policies in Brazil, issued this cryptocurrency investment ban for pension funds as it considered crypto’s “specific investment and risk characteristics” in a resolution issued on March 27.
Brazil Bans Retirement Funds From Investing in Cryptocurrency
Brazil Prohibits Pension Funds’ Investments in Cryptocurrency and Bitcoin
Brazil has taken another step backward when it comes to opening to bitcoin adoption and innovation as an investment asset. The National Monetary Council, one of the key high-level institutions that issue economic and monetary policies, has issued a resolution outright banning retirement funds from investing in cryptocurrency, referred to as “virtual assets.”
Resolution 5,202, published on March 27, amends an earlier resolution that deals with the rules that supplementary pension entities must follow, now stating that these entities cannot “acquire or maintain, directly or indirectly, investments in virtual assets.”
The prohibition also applies to investing in companies that also invest in bitcoin or other digital assets, closing the loopholes available to indirectly put funds on bitcoin through companies like Strategy.
The resolution brings “improvements in relation to the possibilities of allocating resources, including new assets created by recent legislation and imposing maximum investment limits compatible with their risk profiles.”
Economy Minister Eduardo Haddad, specifically, was the one who recommended an outright ban on these investments. As a justification, Haddad explains the measure is focused on providing “greater protection to participants in supplementary pension plans, considering that this is a market with a lower level of maturity, high volatility, and less capacity for monitoring and supervision.”
While cryptocurrency investments are still not common for these kinds of funds, initiatives have been launched to leverage bitcoin from pension funds in Australia, the U.K., Norway, and the U.S.
This move hints at a possible negative stance on cryptocurrency from the Brazilian government’s higher echelons. Before, the President of the Central Bank of Brazil, Gabriel Galipolo, who is also a member of the National Monetary Council, had linked stablecoins to tax evasion and money laundering.
Read more: Central Bank of Brazil Links Stablecoin Growth to Tax Evasion and Money Laundering
Welcome to Billionaire Club Co LLC, your gateway to a brand-new social media experience! Sign up today and dive into over 10,000 fresh daily articles and videos curated just for your enjoyment. Enjoy the ad free experience, unlimited content interactions, and get that coveted blue check verification—all for just $1 a month!
Account Frozen
Your account is frozen. You can still view content but cannot interact with it.
Please go to your settings to update your account status.
Open Profile Settings