Today Boerse Stuttgart Digital announced it is collaborating with Munich Re to provide insurance for institutional cryptocurrency clients who stake Ethereum. With the Proof of Stake consensus mechanism, there’s a risk of slashing or the loss of the cryptocurrency that’s staked. Munich Re intends to provide cover for slashing. The offering will go live in the “near future”.
To grant coverage, Munich Re had to conduct due diligence on the Boerse Stuttgart Digital process.
“We have noticed an increasing interest from institutional investors in the staking sector, eagerly anticipating the chance to participate, provided they have complete confidence in the security of the environment,” said Dr. Oliver Vins, Managing Director of Boerse Stuttgart Digital.
Slashing can happen when validators break certain Ethereum rules, which may or may not have malicious intent.
Boerse Stuttgart Digital‘s blocknox will provide custody for the staking service. Beyond staking, Blocknox already had insurance coverage from Munich Re for digital asset custody.
Meanwhile, earlier this year Boerse Stuttgart restructured its crypto ventures into a single unit, Boerse Stuttgart Digital. At the same time, it raised additional capital from existing backers Axel Springer and Singapore-based SBI Digital Asset Holdings.
In Switzerland, regulator FINMA is taking an interest in staking and considering limiting staking services to those with a banking license. That’s getting a fair bit of pushback from the crypto sector.