Europe: Insurers Will Have To Cover 100% Of Their Crypto Assets

EIOPA strikes hard: insurers will have to cover 100% of the value of their crypto-assets. A decision that changes the game. But that’s not all! It also sends a clear signal to the markets.

A bulwark against crypto volatility

The European Insurance and Occupational Pensions Authority (EIOPA) puts forward a radical proposal. It consists of applying a capital requirement equivalent to 100% of the value of the crypto-assets recorded on insurers’ balance sheets.

Explanation: for every euro invested in cryptocurrency, one euro in own capital must remain immobilized.

This new crypto rule far exceeds current standards:

• Stocks require coverage between 39% and 49%.
• Often perceived as risky, real estate is limited to 25%.

By ranking crypto assets at the top of the risk scale, EIOPA makes a clear cut. It justifies this strictness by recalling past crashes:

• -82% for bitcoin
• -91% for Ethereum

Faced with such shocks, no other asset class offers a comparable experience.

This measure thus reflects a desire to align regulation with the unique characteristics of cryptocurrencies. Extreme volatility, unpredictable price movements, absence of tangible fundamentals… These are all arguments for isolating them within the framework of Solvency II.

Why strike so hard now?

Today, the exposure of European insurers to crypto-assets remains marginal. With 655 million euros committed (less than 0.01% of the 9.6 trillion euros of industry assets), the risk seems contained. However, EIOPA anticipates: it is better to lock down before cryptocurrencies massively invade portfolios.

This preventive movement marks a break: it is no longer a matter of following trends, but of framing them at the source.

Two countries in Europe concentrate the bulk of the exposure:

• the Luxembourg (69%);
• Sweden (21%).

This targeted geography amplifies the effect of the proposal, impacting jurisdictions already sensitive to crypto market movements. But beyond the numbers, the message targets the entire continent.

By launching a public consultation until June 25, 2025, EIOPA opens the dialogue. However, it does not mask its intentions. Indeed, the agency aims to fill a regulatory gap and fully integrate crypto-assets into the European prudential framework.

Although still subject to debate, EIOPA’s recommendation sets a clear course. Europe chooses rigor and caution in the face of an unpredictable crypto market. Other regulators may soon follow the same path or take the opposite stance. To be continued…