Guide insurance capital to flow into encryption coins! The Hong Kong Insurance Authority is drafting new regulations and will start consultations in February next year.

According to a report by Bloomberg, the Insurance Authority (IA) of Hong Kong is formulating a series of new regulations to guide insurance capital towards assets including Crypto Assets and infrastructure, attempting to direct private funds into areas prioritized for government development.

According to internal briefing documents obtained by Bloomberg, the Hong Kong Insurance Authority is preparing to open the doors for insurance funds to virtual assets, but still maintains a high level of caution in risk management.

It is reported that the Insurance Authority will implement a 100% risk capital requirement for Crypto Assets; as for stablecoins, it will depend on the current risk capital requirements in Hong Kong for stablecoins pegged to fiat currency.

The content of this proposal may still change, and public consultation is expected to officially commence from February to April next year, followed by submission to the Legislative Council for review.

The Insurance Authority stated in response to an inquiry from Bloomberg that this year it has initiated an assessment of risk-based capital regulations, with the core objective of supporting the development of the insurance industry and promoting broader economic growth. A spokesperson revealed that they are currently in the stage of collecting industry feedback, and specific proposals will be submitted for public consultation when appropriate.

In addition to injecting fresh capital into virtual assets, this new framework also focuses on “infrastructure.” The Insurance Authority proposed that if insurance companies invest in infrastructure projects in Hong Kong or China, or in projects listed or issued in Hong Kong, they will receive capital incentives. Eligible projects include development projects in areas such as the Northern Metropolis.

Insiders revealed that some insurance companies are actively lobbying for authorities to expand the scope of infrastructure projects, believing that the current framework options are still relatively limited.

As of the end of June this year, there are a total of 158 licensed insurance companies in Hong Kong, with the total premium income of the Hong Kong insurance industry for the whole year of 2024 expected to reach approximately 635 billion HKD (about 82 billion USD). Even if only a small portion of the funds is directed towards Crypto Assets or infrastructure projects, it will significantly boost market liquidity.

_
Disclaimer: This article is for providing market information only. All content and opinions are for reference only and do not constitute investment advice, nor do they represent the views and positions of the blockchain community. Investors should make their own decisions and trades, and the author and the blockchain community will not bear any responsibility for any direct or indirect losses incurred by investors' trades.
_

Tags: IAInsurance Authority Insurance Authority Insurance Industry Regulatory Authority Crypto Assets Virtual Assets Hong Kong