An insurance guarantee to guarantee protection against financial losses appears to be being tried with cryptocurrencies. It is believed that cryptocurrency-backed insurance schemes can be a factor in investments based on digital assets. Understandably, health and life insurance companies are looking to infuse ways to add blockchain to the insurance sector.
According to ConsenSys, a blockchain software company, smart contract-based transactions can implement various products to help unlocked markets. The company also mentioned that Ethereum smart contracts and decentralized applications (dApps) can provide insurance in an automated way, along with tamper-proof audit trails. “I believe that securing cryptocurrency plays a role in supporting investments based on digital assets by mitigating risk, enhancing trust and confidence, protecting against exchange-related vulnerabilities, and facilitating institutional adoption,” said Idul Patel, co-founder and CEO of Mudrex, a cryptocurrency platform. Investing, Tell FE Blockchain.
Insights from a survey by information provider Privacy Affairs, a $4.3 billion cryptocurrency hack occurred between January and November 2022. There was a 37% increase, compared to cryptocurrency scams that occurred in 2021. As reported by Taxguru. In, an accounting and auditing firm, cryptocurrency-backed insurance can help protect investors from various scams and Ponzi schemes. It was also emphasized that the impact of cryptocurrency on insurance can help instill liquidity for businesses and individuals, and ensure protection against disasters, human error, and legal uncertainties.
“I believe that crypto insurance protects lenders from default or bankruptcy, which reduces losses from lending digital assets. In crypto, mutual funds replace traditional insurance. This community-centric method can allow members to assess risks, vote on insurance claims, and obtain coverage,” said Rajagopal Menon, Vice President of WazirX, a cryptocurrency exchange.
According to Research and Markets, a market research store, the global blockchain-powered insurance market could record $32.9 billion in 2031, with a compound annual growth rate of 52.4% (CAGR) between 2022-31. The platform also highlighted major players in this market such as SafeShare Global and Microsoft
Moreover, future projections indicate that cryptocurrency insurance has a promising future, as major financial firms are expected to apply institutional influence to it. As stated by Deloitte, a professional services firm, the need for an interoperable health record should drive stakeholder impact on cryptocurrency-based insurance plans, both in the short and long term.
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