Japanese Bitcoin exchanges and their customers will soon be insured for the first time thanks to a product launched by Tokyo-based insurance firm Mitsui Sumitomo Insurance.
As reported by the regional publication Nikkei, coverage will be offered against damages and losses borne out of breaches or hacks, ranging from 10 million yen to 1 billion yen (between $88,000 and $8.8 million approximately). Notably, coverage also includes losses incurred due to internal company mishaps and employee improprieties, a clause which BitPay is certain to favor following a theft of 5,000 bitcoins in 2015 due to a phishing attack. The bitcoin payments company is wrangling with its insurer which has refused to cover losses of just under 1 million, as a result of the theft.
Furthermore, the insurer will also pay for costs following an incident, such as communicating to customers in the scenario of a breach or dealing with damage suits brought on from other countries. As an example, Mt. Gox, the now-defunct Tokyo-based bitcoin exchange has seen lawsuits from Canada and the United States.
The new insurance product specifically catering to bitcoin exchanges was developed with leading Japanese exchange operator bitFlyer. While bitFlyer sees monthly transactions exceed 100 billion yen, new regulations in the country following the acknowledgment of bitcoin as the equivalent of a traditional fiat currency means that smaller exchanges are gaining prominence and will be benefited from the insurance product. So too, will their customers.
These recent regulatory developments have boosted the bitcoin- and blockchain-industry in Japan. For instance, US-based exchange Coinbase gained investment from MUFG, Japan’s largest bank as the latter confirmed its own digital currency test pilot. A group of Japanese banks also launched a blockchain consortium last month to develop solutions with remittance and payments. While Coinbase is likely to launch in Japan soon, cryptocurrency exchange Gemini founded by the Winklevoss brothers launched earlier this month.
Last month, Japan also curbed its sales tax on bitcoin buying, undoubtedly boosting adoption of the cryptocurrency.
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Last modified: August 12, 2020 6:30 PM UTC