In an intriguing development, Boerse Stuttgart Digital, the crypto-centered department of the Stuttgart Stock Exchange, is set to introduce a completely insured cryptocurrency staking service next year. Adding another dimension to its services, global reinsurance company Munich Re has designed an insurance product specifically addressed towards mitigating the risks of “slashing”.
For the uninitiated, slashing is a term used to describe the sanctions imposed on validators in a proof-of-stake blockchain for the violation of network rules or for engaging in malicious activities. The penalties often involve suspending or entirely losing the staked tokens. While the mitigation of its risk might serve as a noteworthy attraction for potential investors, there still exists an elephant in the room. The underlying issue of potential malicious activities and subsequent harsh penalties clearly indicate that the trustless system of blockchain might not be foolproof.
This development is a fresh addition to a growing trend of mainstream financial institutions extending their services to cover crypto aspects. It appears that the walls separating traditional financial services and digital assets are gradually crumbling. Earlier reports revealed that Deutsche Bank, Germany’s top lender, has been exploring digital asset custody and tokenization with Taurus. Elsewhere, HSBC, a global banking leader, was seen partnering with crypto custody firm, Fireblocks. Franklin Templeton, a notable name in US asset management, too has joined the race for listing the first spot bitcoin ETF.
Boerse Stuttgart Group, Europe’s sixth-largest stock exchange group, harbours Boerse Stuttgart Digital as one of its crucial parts. Earlier this year, it received a license to custody digital assets from the German finance watchdog BaFin via its subsidiary Blocknox GmbH. By adding staking to its custody service, Boerse Stuttgart Digital and its clients could potentially earn rewards on the assets stored with the firm.
According to Dr. Oliver Vins, managing director of Boerse Stuttgart Digital, there seems to be a rising interest from institutional investors in the staking sector who are keen to dive in, provided the environment ensures robust security.
In light of these advancements, many can’t help but wonder if we are tracing the trajectory that will inevitably lead us to the future of finance – one where the traditional and digital assets blend to a seamless financial engine.
Source: Coindesk
