The European Insurance coverage and Occupational Pensions Authority (EIOPA), which oversees the insurance coverage and occupational pensions sectors within the EU, recommends imposing stricter capital necessities for insurers with crypto holdings.
In a statement, the regulator says it suggested the European Fee to introduce a 100% capital requirement for digital belongings held by insurance coverage firms.
The proposed rule will apply no matter how insurance coverage companies label their crypto holdings within the stability sheet or whether or not they have direct or oblique publicity to digital belongings
“The European Insurance coverage and Occupational Pensions Authority revealed at present its technical recommendation to the European Fee, recommending {that a} one-to-one capital requirement be utilized persistently to all crypto holdings of EU (re)insurers.”
The regulator says capital necessities ought to seize the dangers related to crypto belongings, together with excessive value actions, market manipulation, lack of value transparency and low liquidity.
“EIOPA considers a 100% haircut in the usual components prudent and applicable for these belongings in view of their inherent dangers and excessive volatility.”
EIOPA says insurance coverage firms working within the area don’t but have vital publicity to crypto. The regulator’s technical recommendation report says that within the final quarter of 2023, EU insurers invested solely €655 million ($708.68 million) within the nascent asset, which represents simply 0.0068% of their €9.6 trillion ($10.39 trillion) in whole belongings.
“Total, the investments of undertakings in crypto-assets are immaterial.”
In keeping with the Monetary Instances, EU insurers at present allocate capital equal to 60% to 80% of the worth of their crypto belongings.
Observe us on X, Facebook and Telegram
Do not Miss a Beat – Subscribe to get e-mail alerts delivered on to your inbox
Verify Price Action
Surf The Daily Hodl Mix
 
Disclaimer: Opinions expressed at The Each day Hodl aren’t funding recommendation. Buyers ought to do their due diligence earlier than making any high-risk investments in Bitcoin, cryptocurrency or digital belongings. Please be suggested that your transfers and trades are at your individual threat, and any losses it’s possible you’ll incur are your duty. The Each day Hodl doesn’t suggest the shopping for or promoting of any cryptocurrencies or digital belongings, neither is The Each day Hodl an funding advisor. Please observe that The Each day Hodl participates in affiliate internet marketing.
Generated Picture: DALLE3
