EU insurance authority proposes 100% coverage for crypto holdings
From Cointelegraph
Date: March 27, 2025
Time: 11:07 PM:
The European Union’s insurance authority proposed a rule mandating insurance firms to hold capital equal to the value of their crypto assets to mitigate risks for policyholders. The proposal sets a stricter standard for crypto assets than for stocks and real estate. Circle argued for risk-sensitive capital requirements. EIOPA recommended a 100% stress level for crypto assets.
EIOPA outlined four options for the European Commission, with option three being deemed the most appropriate. A 100% stress level is considered prudent due to the high volatility of crypto assets. This would require firms to hold more capital to stay solvent. The proposed rule would reflect a stricter approach compared to other asset classes like stocks and real estate.
Insurers in Luxembourg and Sweden are expected to be most affected by the proposed rule, according to a report cited by EIOPA. These two countries accounted for a significant portion of all crypto asset-related exposures among insurance undertakings. Ireland, Denmark, and Liechtenstein also had smaller proportions of crypto asset exposure. Most of these exposures are held within funds like exchange-traded funds.
Read more at Cointelegraph: EU watchdog wants insurers’ crypto holdings 100% covered, citing volatility