INSURING CRYPTO
Should crypto be regulated ?
After the EU passed a vote to implement the first regulatory framework for cryptocurrencies in a major financial market , Markets in Crypto Assets ( MiCA ), what does this mean for the future of crypto , where decentralised assets are regulated ?
Seely feels that its introduction “ may serve to increase general confidence and faith in cryptoassets ”, which , even now , is seen as “ a ‘ Wild West ’ area full of unpredictability ”. Not only this , but the passed regulatory framework , scheduled to be implemented from 2024 , “ may serve to provide more stability and consistency for these assets , as well as providing more legal and regulatory protection ”.
So , not only could this help insurers “ increasingly see cryptoassets as a market they can meaningfully explore and develop ”, according to Seely , but it also suggests that the positives of regulating crypto outweigh the concerns of those Wooller calls “ crypto purists ”.
She adds : “ Crypto purists will claim that truly decentralised assets should not be regulated ; while , philosophically , this may be true , the reality is that bad actors exist everywhere and prevent what every financial system needs : trust .
“ Regrettably , regulators have been slow to adapt ; globally , the digital assets industry reached US $ 3tn before governments focused on providing regulatory clarity . For the industry to truly succeed , and for blockchain technology to reach its full potential , there needs to be robust , proportionate regulation . Part of that cure is insurance protections for retail and institutional investors alike when the worst can and invariably does happen .”
both in terms of indemnity insurance and in protecting against hacking , scams and lost access . Unsurprisingly , in some jurisdictions , regulators are making insurance-based solutions a requirement , which will be of long-term benefit to investors and the ecosystem alike .”
Issues extend far beyond crypto Though a wide-ranging regulatory requirement for crypto insurance is not currently apparent in all global markets , there has , perhaps , been recent cause for the protection of cryptoassets to be made a
88 July 2023