- Rules to unlock insurance capital for crypto while enforcing conservative risk controls.
- Insurance capital legitimizes crypto, adding risk discipline and regulatory confidence to unlock broader institutional adoption.
Hong Kong is reportedly considering new rules that could unlock a major pool of insurance capital for cryptocurrencies. The Hong Kong Insurance Authority (IA) has proposed allowing the city’s 158 authorized insurers to invest in digital assets and related infrastructure.
While this move reflects the growing openness to crypto, regulators are adopting a conservative risk approach. Under the proposal, insurers would face a 100% risk charge on direct cryptocurrency holdings. This would require them to hold one dollar in reserves for every dollar invested to cushion against market volatility.
Stablecoin would receive more favorable treatment, with risk charges tied to the fiat currencies they are pegged to. The Hong Kong Monetary Authority is expected to issue its first stablecoin licenses in early 2026.
The public consultation on this proposal will run from February to April 2026, with legislative submission projected later in the year.
See Related: Hong Kong Invests Over $6.4M Into Web 3 Development
Why Insurance Capital Matters For Crypto’s Institutional Future
According to industry experts, institutional capital from insurers validates digital assets as a serious asset class. This capital also brings deep pools of long-term funds and rigorous risk management to markets that have historically been retail-driven.
Henri Arslanian, PwC’s fintech & crypto leader for Asia, shared in a statement,
“Most institutionally minded crypto firms want to buy proper insurance… and in many cases, getting adequate insurance coverage is a regulatory or legal requirement.”
Arslanian underscored the importance of insurance capacity in unlocking broader crypto participation. He pointed out that regulatory clarity will transform uncertainty into confidence, which is essential for pension funds, asset managers, and insurers to meaningfully allocate to cryptocurrencies.
