EU Insurance Authority: Insurers Must Maintain Capital Equal to the Value of Held Virtual Assets
Summary
- The European Insurance and Occupational Pensions Authority (EIOPA) has proposed a regulation requiring insurers to maintain capital equivalent to the full amount of their virtual asset holdings.
- This regulation applies much stricter standards than for traditional assets, reflecting the high volatility and inherent risks of virtual assets.
- EIOPA emphasized the legitimacy of the regulation by stating that applying a 100% stress level is a reasonable measure.
The European Union (EU)'s insurance supervisory body has proposed regulations regarding insurers' holdings of virtual assets (cryptocurrencies) and capital requirements.
According to Cointelegraph on the 28th (local time), the European Insurance and Occupational Pensions Authority (EIOPA) included in its technical advice report submitted to the European Commission a regulation stating that "insurers must maintain capital equivalent to the full amount of held virtual assets."
This is a much stricter standard than for traditional assets like stocks or real estate, and EIOPA stated in a separate announcement that applying a 100% stress level is a reasonable measure considering the inherent risks and high volatility of virtual assets.
Suehyeon Lee
shlee@bloomingbit.ioI'm reporter Suehyeon Lee, your Web3 Moderator.
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