It is no longer news that Japan is one of the most conducive countries for Bitcoin operations. Bitcoin is already recognized as legal tender on par with the Yen in terms of acceptability. Of course, Japan used to be home the world’s biggest Bitcoin exchange, the now defunct Mt. Gox. In October, Japan decided to curb sales tax on Bitcoin purchases as part of efforts to boost the use of the cryptocurrency in the country.
The Nikkei Asian Review reported that the Japanese Financial Ministry and the country’s Financial Agency are in talks to end the 8% consumption tax rate. Now, there’s another piece of good news for Bitcoin coming out of Japan that will gladden the heart of Bitcoin investors. The Nikkei Asian Review reports that Tokyo-based insurance firm Mitsui Sumitomo Insurance is developing an insurance product that will cover damages and losses at Bitcoin exchanges.
Here’s what we know about the new insurance coverage for Bitcoin exchanges
Mitsui Sumitomo Insurance is reportedly working with bitFlyer to develop an insurance product for Bitcoin exchanges. The insurance premium payable will vary from one exchange to the other but actuarians forecast that the premiums will range between several hundred thousand Yens to several million Yens.
One of the great perks of having insurance coverage for Bitcoin exchanges is that it would ease anxiety among Bitcoin owners that their precious crytocurrency could be lost overnight in an hack. Security experts observe that a single successful cyberattack on a Bitcoin exchange could wipe out billion of yen in Bitcoin. Most small exchanges don’t have enough resources to create a security system that might keep the bad guys out and even the best security defenses might still succumb to the efforts of a determined hacker.
Bitcoin exchanges can now enjoy insurance coverage
In the last couple of years, the Bitcoin industry has suffered setbacks in the form of data breaches, hacks, and stolen Bitcoin at exchanges. If you lost money in the last couple of hacks targeted at Bitcoin exchanges, you might want to relax because the trouble days are over. According to the report, the Japanese insurance firm will provide coverage against damage and loss to Bitcoin exchanges for 10 million yen to 1 billion yen, which is between $88,000 and $8.8 million.
Another great feature of the insurance coverage is that it protects Bitcoin owners in the event of losses due to internal issues. Bitcoin exchange might make dumb business moves or its workers might perpetrate fraud but insurers are not usually willing to cover losses that happen because of internal issues. For instance, in 2015 BItpay suffered the theft of 5,000 Bitcoins during a phishing attack. Its insurer has refused to cover the losses which is running under a million dollars.
Mitsui Sumitomo Insurance has also revealed that its insurance policy for Bitcoin exchanges will also cover other costs that might accrue after an incident. For instance, the insurer will bear the costs of reaching out to customers in the event of a data breach; the insurer will also settle damage suits that might be filed against the exchange in the event of theft, losses, hacks, or data breaches.