Crypto may enter insurers’ portfolios as Hong Kong reviews capital rules

cointelegraphОпубліковано о 2025-12-22Востаннє оновлено о 2025-12-22

Анотація

The Hong Kong Insurance Authority is proposing to allow insurance companies to allocate capital to cryptocurrencies and infrastructure projects. Under the proposal, crypto investments would be subject to a 100% risk charge, requiring insurers to hold regulatory capital equal to the full value of their crypto holdings. The move is part of a broader review of the risk-based capital regime to support the industry and economic development. This follows a global trend, as the EU has proposed similar capital rules, and insurers like MassMutual and Allianz have already made crypto investments. Hong Kong has been actively developing its crypto regulatory framework, including stablecoin rules and a fintech strategy focused on tokenization, despite mainland China's continued restrictions on crypto activities.

The Hong Kong Insurance Authority is reportedly proposing to allow insurance capital allocation to cryptocurrencies and infrastructure projects.

Bloomberg reported on Monday that the city’s regulator started reviewing the risk-based capital regime to support the insurance industry and economic development.

Crypto allocations would be subject to a 100% risk charge, meaning that the insurer would need regulatory capital roughly equal to the full value of its crypto position.

The proposal would also allow infrastructure investment at a time when Hong Kong faces a budget deficit. Some companies that submitted feedback reportedly urged that coverage be extended broadly, noting that the current proposal has significant limitations.

A spokesperson reportedly explained that the institution is now gauging industry feedback and will initiate public consultation later.

The Hong Kong Insurance Authority did not respond to Cointelegraph’s media inquiry.

Hong Kong Insurance Authority headquarters. Source: Ceeseven, CC BY-SA 4.0

Related: China Merchants Bank tokenizes $3.8B fund on BNB Chain in Hong Kong

Insurance investment in crypto moves out of the fringe

Insurance companies investing in cryptocurrencies is increasingly becoming more popular. In March, the European Union’s insurance authority proposed a blanket rule that would require insurance companies to maintain capital equal to the value of their crypto holdings, similar to the reported Hong Kong rule.

Some insurance companies are also using cryptocurrency to achieve their goals.

In March, Barbados-based insurer Tabit raised $40 million in Bitcoin (BTC) to bolster its balance sheet and back traditional insurance policies.

Germany’s largest insurance company Allianz invested in a convertible note offering by leading Bitcoin treasury company Strategy in November last year.

Still, the earliest players moved much sooner.

At the end of 2020, Massachusetts-based insurance firm MassMutual purchased $100 million in Bitcoin for its general investment account. At the time, this was about 5,470 BTC for $18,279 per coin.

At the current price of over $89,000, that would be worth over $488 million.

Related: Hong Kong rules limit stablecoin derivatives trading: DBS CEO

Hong Kong takes crypto seriously

Hong Kong has been paying particular attention to the cryptocurrency industry recently. In November, the Hong Kong Monetary Authority (HKMA) unveiled its Fintech 2030 strategy. It includes real-world assets and tokenization, a rising crypto trend that is drawing global institutional interest.

Hong Kong started enforcing its stablecoin rules in August, reportedly drawing applicants from mainland China banks.

However, Beijing has not warmed up to crypto-related initiatives. Key activities related to crypto, such as mining and trading, are prohibited on the mainland.

In August, Chinese regulators reportedly told local firms to stop publishing research or holding seminars related to stablecoins. In September, a since-removed report by finance outlet Caixin claimed mainland Chinese firms operating in Hong Kong may be forced to withdraw from cryptocurrency-related activities.

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Пов'язані питання

QWhat is the Hong Kong Insurance Authority proposing regarding insurance capital allocation?

AThe Hong Kong Insurance Authority is proposing to allow insurance capital allocation to cryptocurrencies and infrastructure projects.

QWhat risk charge would crypto allocations be subject to under the proposed rules?

ACrypto allocations would be subject to a 100% risk charge, meaning insurers would need regulatory capital roughly equal to the full value of their crypto position.

QWhich other region has proposed a similar capital requirement for insurance companies' crypto holdings?

AThe European Union's insurance authority proposed a similar blanket rule in March that would require insurance companies to maintain capital equal to the value of their crypto holdings.

QWhat significant Bitcoin investment did MassMutual make in 2020 and what would it be worth today?

AIn 2020, MassMutual purchased $100 million in Bitcoin (about 5,470 BTC at $18,279 per coin). At current prices over $89,000, that would be worth over $488 million.

QHow does Beijing's stance on cryptocurrency differ from Hong Kong's approach?

ABeijing has not warmed up to crypto-related initiatives and prohibits key activities like mining and trading on the mainland, while Hong Kong has been paying particular attention to the cryptocurrency industry with various regulatory developments.

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