UAE Central Bank approves digital assets custodial risk insurance

The UAE Central Bank has approved OneDegree, Asia’s licensed insurer for digital assets, and Dubai Insurance Company’s issuance of digital assets custodial risk insurance to their customers in UAE.

Previously, OneDegree and Dubai Insurance partnered in 2023 and have supported many digital asset companies with their insurance needs. Custodial risk insurance completes the product portfolio and allows the partners to offer a one-stop shop for digital asset companies in the UAE under the brand ‘OneInfinity.’

Dubai’s VARA mandates insurance coverage of digital assets

Custodial risk insurance is an essential part of the risk management strategy for digital asset exchanges, custodians, and other service providers. It is mandated by many regulators worldwide. VARA, Dubai’s dedicated regulator for digital assets, requires such coverage along with professional indemnity and directors’ and officers’ insurance. With this latest approval, specialized custodial risk insurance can be offered directly in UAE for the first time. Custodial risk insurance protects companies against the risk of losing access to digital assets including through third party hacks and theft, internal fraud and physical damage to the storage media.

Robin Scott, General Manager of Middle East for OneDegree, said, “UAE has only strengthened its position as a digital asset hub since our market entry last year. There are hundreds of companies setting up across the Emirates and looking to obtain key licenses. For this, they need strong, tailored insurance policies. It’s fantastic that we are now able to offer the full suite of OneInfinity digital asset products to these inspiring companies.”

Abdellatif Abuqurah, CEO of Dubai Insurance, added, “We are thrilled to work with OneDegree on this important development in the UAE. Dubai Insurance is committed to bringing the most innovative insurance products to the UAE. Custodial risk insurance is something brand new to the market but that satisfies an urgent demand as UAE cements its position as a global leader in digital assets.”

OneInfinity by OneDegree offers tech-enabled digital asset insurance and risk management solutions globally. By offering tailor-made insurance to end-to-end digital asset players (including trading platforms, custodians, asset managers, banks, family offices and technology providers), OneDegree strengthens its clients’ competitive edge by enabling them to implement best practices under a robust risk management framework and secure a safety net for their assets under custody.

Recently, OneDegree has partnered with Saudi Arabia’s Walaa Cooperative Insurance Company, an insurance and reinsurance company where Walaa will support OneDegree as a reinsurer for its market-leading digital asset products globally. The partnership was announced during the 24 Fintech event in Riyadh, KSA.