365Crypto
UAE Central Bank Approves Crypto Custodial Insurance
The Central Bank of the UAE (CBUAE) has approved a new insurance product to protect digital assets, allowing issuers to offer custodial risk insurance. This type of insurance is designed to safeguard crypto service providers and their clients from asset loss.
New Insurance from OneDegree and Dubai Insurance
Hong Kong-based OneDegree and Dubai Insurance have teamed up to launch “OneInfinity,” a brand offering custodial risk insurance in the UAE. This insurance covers potential losses for digital assets stored by exchanges, custodians, and asset managers.
What Does Custodial Risk Insurance Cover?
Robin Scott, general manager at OneDegree, explains that custodial risk insurance protects against risks like hacking, internal fraud, or physical damage to storage. Essentially, it acts as a safety net for those who manage or store digital assets.
Scott compares it to traditional banking’s public deposit protection, but for the Web3* space. He highlights that regulators worldwide, including those in the UAE, are pushing for this kind of insurance to ensure consumer protection.
UAE-Based Insurance for Local Companies
The CBUAE’s approval means UAE-based companies can now purchase custodial risk insurance locally. With more companies in the UAE getting licensed to handle digital assets, demand for this insurance is expected to grow.
Footnotes:
- Web3: A term referring to the next generation of the internet, which includes decentralized technologies like blockchain and cryptocurrency.
Source: https://cointelegraph.com/news/uae-central-bank-custodial-risk-insurance-product-digital-assets
