Hong Kong suggests legislation to permit insurers to invest in cryptocurrency.

Proposed Regulatory Changes: Hong Kong's Insurance Authority is considering new rules that would allow insurers to invest in cryptocurrencies and infrastructure, marking a significant regulatory shift in the city's approach to digital assets.

Risk Management Framework: Under the draft framework, crypto assets would incur a 100% risk charge, requiring insurers to hold capital equal to the full value of their crypto investments, while stablecoins would have risk charges linked to their fiat counterparts.

Infrastructure Investment Incentives: The proposal includes capital incentives for insurers investing in projects related to Hong Kong and mainland China, particularly in the Northern Metropolis, as the city seeks private capital amid budget constraints.

Ongoing Developments in Crypto: As Hong Kong enhances its digital asset framework, including a stablecoin licensing regime, the insurance authority's cautious approach reflects a desire to balance innovation with regulatory oversight, with public consultations planned for early 2024.