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Spain requires insurers to report if they have investments in bitcoin

The General Directorate of Insurance and Pension Funds (DGSFP) of Spain is putting the magnifying glass on the companies of the union and their possible relationship with bitcoin (BTC) and cryptocurrencies. The agency wants to know if the insurers have investments in digital assets and, if so, why they have them.

The authorities gave a period of 15 days for the companies to send their reports and justifications , if applicable. The general management notified the measure through a letter sent last week to the companies in the sector, according to the local media El Confidencial.

BTC monedas aseguradores inversiones
The General Directorate of Insurance and Pension Funds has its main headquarters in Madrid. Source: Triplecaña / Wikipedia.

According to the information released, companies must report any type of investment with cryptocurrencies. That is, the companies are obliged to report on direct investments , with control of cryptocurrencies, or indirectly, through financial derivatives or other mechanisms, for example.

Notification of possible investments includes any executed transaction at the close of fiscal year 2020 and until February 28 of this year. If any organization maintains exposure with cryptocurrencies, then the company must comply with the “investment regulations according to the management, supervision and solvency of insurers and reinsurers.”

Questioning bitcoin as a safeguard alternative

The guideline of the insurance department occurs one month after the Bank of Spain and the National Securities Market Commission (CNMV) alerted again on the volatility of cryptocurrencies . In addition, both institutions indicated that there was an increase in “advertising” to attract investors.

The letter from the regulatory body would have been sent from the balance and risk analysis department as a result of the bank’s joint warning and the securities commission. CriptoNoticias reported in February that the position of the bank and the CNMV is not new since three years ago they also warned that it was “speculative bubbles.”

The entities have reiterated that the world of cryptocurrencies it is an “unregulated space” as a cautionary measure. However, the market is growing not only among private users, but on a large scale with companies and investment funds from different countries adopting bitcoin as a safeguard or savings mechanism.

Dozens of companies such as MicroStrategy, Tesla or Square are buying bitcoins and adding them to their balance sheets as a substitute for cash . This behavior is due, in part, to the massive printing of funds that governments have authorized to try to counteract the economic situation left by the COVID-19 pandemic. That is, they would be doing it out of fear of global inflation.

Faced with this boom in institutional interest in bitcoin, for example, its price has reached new peaks, which has captured the interest of the media communication around the world. This seldom-seen coverage would be what Spanish regulators consider as “advertising.”

If a Spanish insurer admits that it has invested in bitcoin, what it would reflect is the confidence that companies of this type have granted bitcoin as an asset, even above national currencies or other types of assets or commodities.

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Sandra Loyd
Sandra is the Reporter working for World Weekly News. She loves to learn about the latest news from all around the world and share it with our readers.

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