Russian insurance firms launch life policies tied to Bitcoin ETFs

Russian companies are offering investment insurance policies tied to the value of Bitcoin, the leading cryptocurrency by market capitalization.

The new products expand crypto investment opportunities in Russia that have been growing since its central bank permitted the offering of derivatives based on decentralized digital assets.

Russian insurers offer policies linked to American Bitcoin ETFs

Two insurance firms, Renaissance Life and BKS Life Insurance, have announced crypto-related investment products on the Russian market, the Bits.media news outlet revealed on Wednesday.

Renaissance Life is launching a Bitcoin-linked life insurance policy under its “Cryptocapital” program. It will provide up to 60% return on the growth of U.S. exchange-traded funds (ETFs) that track the price of Bitcoin (BTC).

The policy is valid for two years with a minimum down payment of 1.5 million Russian rubles ($19,000), the report detailed.

If a client invests that amount and the value of Bitcoin doubles during the period, they will eventually receive 2.4 million rubles (over $30,000) before tax, explained Oleg Kiselev, the company’s chief executive.

And if the value of the cryptocurrency falls below the amount of the down payment, the investor will get 1.5 million rubles back, the CEO promised.

Investors will have to spend at least 3 million rubles ($38,000) for the three-year policy linked to Bitcoin ETF futures that BKS Life Insurance is offering.

Holders will be able to adjust the share of an asset included in the policy’s investment portfolio throughout the entire period, depending on market conditions.

The unique crypto products will be available to qualified investors by the end of the year, the Russian companies said.

Moscow Exchange to expand crypto futures offerings

The yield of the new investment life insurance policies is linked to the growth of the shares of BlackRock’s iShares Bitcoin Trust ETF (IBIT) through futures contracts traded on the Moscow Exchange (MOEX).

Russia’s largest stock market started trading Bitcoin futures last month, shortly after the Central Bank of Russia authorized the sale of crypto derivatives to “highly qualified investors” in late May.

Its initial offering is based on IBIT, the largest Bitcoin ETF by capital under management. The fund holds an estimated $70 billion in BTC, accounting for more than half of the capital of all U.S. Bitcoin ETFs.

Later in June, the Russian platform announced it would offer a new futures contract on its own recently introduced Moscow Exchange PFI Bitcoin Index (MOEXBTC), calculated using price data from some of the largest global crypto exchanges.

This week, the Managing Director of the Moscow Exchange, Maria Patrikeeva, revealed that the exchange is preparing to increase the number of listed crypto investment products.

The executive explained that Russia’s current regulations allow the launch of derivative financial instruments using cryptocurrency-linked securities as underlying assets and elaborated:

“These instruments are in demand by both professional market participants and qualified investors. Besides the futures contract on the iShares Bitcoin Trust ETF, we may consider other funds, for example, BlackRock’s ETF on Ether.”

Patrikeeva highlighted that the contract on IBIT is already among the top 30 offerings on the Russian futures market. Since its launch on June 4, the product has already reached a daily trading volume of 1 billion rubles ($12.7 million).

The MOEX official insisted that the exchange intends to play an active role in the future development of the Russian market for this new class of crypto-related assets within the country’s existing regulatory framework.

Financial authorities in Moscow, namely the Bank of Russia and the Ministry of Finance, have stubbornly maintained that only qualified investors should have access to cryptocurrencies and their derivatives. However, according to a recent estimate, Russians already hold over $25 billion in crypto.

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