Hong Kong virtual insurer OneDegree partners with start-up in maiden cryptocurrency insurance foray
- OneDegree will offer up to US$100 million in coverage to HKbitEX
- Insurer hopes to share its risk management and underwriting standards with other industry participants and regulators to increase adoption
Hong Kong virtual insurer OneDegree has partnered with cryptocurrency exchange Hong Kong Digital Asset Exchange (HKbitEX) to offer insurance for cryptocurrencies, as they try to address concerns holding back institutional investors from investing in the US$3 trillion asset class.
It is the first insurer in Asia to underwrite insurance policies for digital assets, a service that has only recently become available for players in the virtual asset sector through specialist insurers based primarily in the United Kingdom and Bermuda.
“Based on our research, we expect that globally less than 1 per cent of the companies that are interested in buying cryptocurrency insurance policies would be eligible for such coverage,” said Becky Tam, chief risk officer at OneDegree.
The insurer was hoping to share its risk management framework and its underwriting standards for digital assets with other industry participants and regulators, so that more insurers could become comfortable with offering cryptocurrency insurance, she added. A bigger market will ultimately benefit insurers, as they will have more channels to pass on risk through, for example, other reinsurers.
14:59
Binance CEO explains how the crypto-exchange is charting a path to become a financial institution
The launch comes after bitcoin hit a historical high of US$68,500 on Tuesday, bringing the market capitalisation of all cryptocurrencies, including ethereum and litecoin, to US$3.1 trillion.