Hong Kong Proposes Strict Crypto Risk Charges for Insurers
Hong Kong's insurance regulator is drafting a capital framework that WOULD permit insurers limited exposure to cryptocurrencies while imposing some of the most stringent risk charges in the market. Unbacked digital assets would face a 100% capital requirement, effectively forcing insurers to fully reserve against volatility risks.
Stablecoins registered under Hong Kong jurisdiction will receive differentiated treatment, with risk charges tied to their fiat currency backing. This bifurcated approach reflects regulators' attempt to balance innovation with financial stability as institutional interest grows.
The proposal signals Hong Kong's cautious embrace of digital assets while maintaining robust safeguards. By channeling insurance capital toward regulated crypto products, authorities aim to foster responsible market development aligned with broader financial priorities.
