Marsh has announced (26 March 2024) the launch of a new insurance facility for custodians of digital assets, including financial institutions. The largest facility of its kind, it provides insurance capacity up to $825 million and is available to Marsh clients globally.
The facility will support those organisations with digital assets held offline – known as cold storage – as well as those seeking to cover certain elements of risks for assets secured by Multi-Party Computation (MPC) or other custody solutions which do not operate entirely offline.
Backed by Lloyd’s syndicates and London-based international insurers, the facility will support organisations in protecting their digital assets against risks related to physical natural perils, third party physical theft, and internal collusion by those employees responsible for secure storage.
Organisations in a wide array of industries are seeking to establish themselves as key players in custody following a decade of substantial growth and maturation of the digital asset market. According to Marsh’s Global Technology Industry Risk Study 2023, 50% of respondents in the global technology industry are already operating in or exploring opportunities around digital assets. Further, 136 US banks under the Federal Deposit Insurance Corporation are planning or are already involved in various initiatives related to digital currencies.
The facility was developed by Marsh Specialty’s Digital Asset team in New York and London, which offers risk transfer solutions to firms globally that operate in the areas of blockchain, cryptocurrency, and digital assets.
Jacqueline Quintal, Global Digital Asset Leader, Marsh Specialty, said: “We anticipate continued focus on and activity in the global digital assets space, as organisations navigate the complex risk environment and interconnected, expanding ecosystem of stakeholders.
“Marsh’s facility provides custodians with protection for the key operational risks they face in the management of digital assets; we look forward to supporting clients globally in aligning their risk financing and evolving commercial strategies, as they focus on building their operational resilience and market presence in this fast-growing sector.”