Hong Kong Proposes Rule Change Allowing Insurers to Invest in Crypto
Hong Kong's insurance regulator has unveiled a proposal that WOULD permit insurers to allocate capital to cryptocurrencies and infrastructure projects. The move marks a significant expansion of permitted investments for the sector, aligning with the city's ambition to become a digital finance hub.
The Hong Kong Insurance Authority plans to impose a 100% risk charge on crypto assets under the new framework. Stablecoin investments would face risk charges based on the fiat currency they're pegged to. The proposal is currently undergoing industry consultation before expected implementation in 2024.
This development follows the Hong Kong Monetary Authority's (HKMA) plans to approve its first batch of stablecoins early next year. The insurance sector currently manages approximately HK$635 billion ($105 billion) in assets.