The Central Bank of the United Arab Emirates (CBUAE) has approved a new product allowing an issuer to provide digital assets custodial risk insurance.

Hong Kong-based insurance provider OneDegree and the UAE's Dubai Insurance announced that they started providing digital asset custodial risk insurance to UAE customers, with CBUAE approval.

Custodial risk insurance is part of the risk management strategies for custodians, exchanges, and other digital asset service providers, as many regulators worldwide require this product.

This type of insurance enables crypto service providers to give their clients "peace of mind" against the risk of losing their assets, acting as a private sector solution similar to public deposit protection schemes in traditional banking.

Regulators' primary focus on consumer protection has driven the requirement for this insurance product, ensuring businesses and individuals using digital asset platforms are protected in case of asset losses.

The CBUAE approval means companies in the UAE can now acquire this insurance within the country, and OneDegree and Dubai Insurance have already started writing custodial risk insurance for UAE-based clients.

Experts expect a large number of firms to require the insurance product as more companies get licensed in the UAE, providing an important safeguard for the growing crypto ecosystem.

Source: https://cointelegraph.com/news/uae-central-bank-custodial-risk-insurance-product-digital-assets

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