EU’s Crypto Proposal: 100% Backing? You Won’t Believe This! 😲

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  • So, an EU agency thinks 100% capital backing for crypto insurers is a great idea. High volatility, they say. Really? Who knew? 🙄
  • Circle, the stablecoin folks, are like, “Hey, maybe let’s not treat all crypto like it’s a ticking time bomb.” Good point, right? 🤔

Now, the European Union’s insurance watchdog, EIOPA, has come up with this brilliant plan for 1:1 backing capital requirements for insurers dealing with crypto assets. Because, you know, why not? 😏

According to them, this 100% capital backing is just what we need because, surprise, surprise, crypto is volatile. They even said,

“EIOPA considers a 100% haircut in the standard formula prudent and appropriate for these assets in view of their inherent risks and high volatility.”

Room for flexibility

They claim this move will fill a regulatory gap in the MiCA framework, which, let’s be honest, is like Swiss cheese—full of holes. 🧀

And get this: Bitcoin and Ethereum had drops of 82% and 91% in the past. So, naturally, they think we should assume an asset could just vanish into thin air. Makes sense, right? 🤷‍♂️

Oh, and EIOPA says Luxembourg and Sweden are in for a rough ride if the EU Commission goes ahead with this. These countries are practically swimming in crypto assets—over 90% exposure! Talk about a risky swim! 🏊‍♂️

But wait, there’s more! They admitted that a blanket 100% capital requirement might not be the best fit for a future where crypto is as common as, I don’t know, coffee? ☕️

“A possible broader adoption of crypto assets may, however, require a more differentiated approach down the line.”

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2025-03-28 19:06