CNA Financial's move reflects caution in the insurance sector as the debate around the stability and reliability of NFTs continues.
CNA Financial, one of the top commercial insurers in the US, has decided not to extend its coverage to non-fungible tokens (NFTs) in a $20 million policy it underwrites for Schwab Strategic Trust.
According to regulatory documents filed with the US Securities and Exchange Commission (SEC), CNA Financial ruled out NFTs from its coverage plan, stating that the policy wouldn't indemnify any "loss, damage, claim, occurrence, or suit" linked to NFTs.
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In the documents, NFTs are elaborated as "unique digital identifier connected to any digital ledger technology which may be used to certify authenticity or ownership of anything, including but not limited to any digital, tangible, or intangible item, but cannot be substituted or exchanged for any similar item."
While the insurance firm clarified that cryptocurrencies do not fall under the NFT exclusion, the decision arrives when interest in NFTs appears to be weakening.
Data from Glassnode showed a noticeable decrease in gas usage for NFT transactions, hinting at a shift in NFT market dynamics.
However, the world of entertainment and business hasn't entirely shunned NFTs. Soccer superstar Cristiano Ronaldo unveiled his intention to release more NFTs while undergoing a lie-detector test. The event was organized to celebrate the launch of Ronaldo's second NFT collection in collaboration with crypto exchange Binance.
In a separate initiative, German airline Lufthansa launched an NFT-based app on August 31st, enabling passengers to scan their boarding passes to collect NFTs that could later be redeemed for perks like flight upgrades or access to airport lounges.
CNA Financial's decision to exclude NFTs from its $20 million policy for Schwab Strategic Trust signifies a cautious approach toward this emerging asset class. As NFTs navigate a period of fluctuating interest and valuation, the exclusion indicates the broader market's mixed feelings about the long-term viability of these digital assets.
