The newest conventional financial instrument to undergo the explosive tokenization of cryptocurrency is life insurance. A blockchain-based life insurance business called Infineo announced on Tuesday that it has moved the “first-ever” tokenized life insurance policy onto a distributed ledger system. A news release stated that the company used the Provenance network to mint insurance totaling $9.4 million.
Provenance Blockchain Labs, which is responsible for the ecosystem development of the Provenance network, helped tokenize the policies. Peer-to-peer transactions and new offers backed by tokenized life insurances are made possible by the secondary markets for tokenized policies that Imineo says it is creating.
The minting of Infineo took place at a time when traditional capital markets and cryptocurrency are becoming more and more entwined, with institutions putting tokens representing traditional financial assets like bonds, credit, and private equity on blockchain networks. The process is commonly known as tokenization of real-world assets (RWA), and according to a Bank of America analysis, it has the potential to upend and change established financial systems. It is hoped by participants that tokenization will improve transparency, expedite settlements, and build more effective systems.
“The digitization of life insurance policies not only unlocks global accessibility to life insurance, but also delivers efficiencies and cost savings for industry stakeholders at every point along the value chain,” infineo founder and CEO Cole Snell, said in a statement.
According to Infineo, adopting blockchain rails might help the $3 trillion life insurance business by shielding policy holders and beneficiaries from over $7 billion in unclaimed payouts, for example. According to rwa.xyz data, Provenance is home to over $7 billion in active home equity lines of credit. The company’s website states that it has $13 billion in total value locked (TVL) on the chain. It’s a blockchain powered by Cosmos that was developed in 2018 by fintech company Figure.