Banking giant Lloyds of London has launched a new insurance policy for cryptocurrency. The policy, in conjunction with Coincover, is to protect against losses arising from the theft of cryptocurrency held in online wallets.
It’s the first of its kind and offers flexible limits from as little as £1,000, which can increase or decrease in line with price volatility of cryptocurrencies.
Big Boost For The Crypto Space as Lloyds Doubles Down
It’s a major shot in the arm for the crypto space as such a banking giant is wanting to get into the crypto space.
It’s actually the second major piece of news regarding Lloyds after it was announced last week that crypto wallet BitGo was offering its users Lloyds insurance cover of up to $100 million.
Cryptocurrency wallets are pieces of hardware or software that is basically an interface showing you how much cryptocurrencies you have. Although the cryptocurrencies do not leave the blockchain, if you have access to the wallet, you have access to the cryptocurrencies they display.
Because wallets are a centralized database, they’re attractive to hackers. Although they are relatively secure, and can have multiple levels of security, hacking and phishing is getting more sophisticated, and so some see the need for insurance is a necessity.
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Lloyds Aiming To Be A 21st Century Bank
Lloyd’s policy is part of its Product Innovation Facility (PIF), which aims to be the world’s most customer-centric digital insurance platform. The ambition for the Facility is to become a marketplace that offers better value for the changing and diverse needs of customers through highly-responsive, cutting-edge risk management products and services.
A spokesman for Lloyds Insurance arm, Atrium said: ‘There is a growing demand for insurance that can protect cryptocurrency as it becomes increasingly popular. It is a testament to Lloyd’s that the market has put together an innovative solution to mitigate these new risks and protect against.’
David Janczewski, CEO, Coincover, says: We are delighted to have worked with Atrium and the Lloyd’s PIF members to bring such a unique and timely solution to the crypto asset market. As the crypto asset market heats up again at the start of 2020, a new wave of crypto-curious customers are standing by at the ready to jump in.’
This is all bullish news for the crypto space, especially considering banks wouldn’t touch crypto 2 years ago.
Many crypto purists want rid of banks altogether and see cryptocurrencies as the replacements for banks altogether. As much as that might be nice idea, it's not feasible, at least for the next couple of decades, and besides insurance cover is necessary for mass adoption.
Author: Tommy Limpitlaw