Aon, one of the world’s largest insurance brokers, is testing the use of stablecoins to pay insurance premiums, highlighting the growing role of digital dollars in traditional financial infrastructure after the adoption of the GENIUS project last year.
In an announcement on Monday, UK-based Aon said it had conducted a test that calculated insurance premiums for clients including Coinbase and Paxos using USDC (USDC) in Ethereum and PayPal USD (PYUSD) in Solana.
Tim Fletcher, director of Aon’s financial services division, said the pilot reflects the company’s effort to explore stablecoins as a means of payment and predicts that tokenized assets will become more widely used in financial transactions.
Aon said in August that its analysis showed that 120 reinsurers will write about $2 trillion in written premiums in 2024.
Instead of sending funds through traditional bank wires, rewards were paid using stablecoins on blockchain networks. The pilot shows how financial institutions are experimenting with blockchain settlement systems, not just relying on traditional payment infrastructure.
This approach could have implications for the insurance industry, where premium payments are typically channeled through banks, clearing systems and international money transfers – processes that can take days, especially for cross-border transactions. Stablecoin transfers can be settled in minutes.
The pilot did not include new insurance products or onchain policies. The basic insurance cover remained unchanged and the only difference was the use of stablecoins to calculate the premium payments.
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Stablecoins are attracted among financial institutions
Aon’s pilot also comes amid more robust regulation for stablecoins following the passage of the GENIUS Act, which established a federal framework for the issuance and oversight of dollar-backed stablecoins in the United States.
The development reflects a broader shift as traditional financial institutions increasingly explore stablecoins for payments and settlement infrastructure. Several major banks, including Barclays, JPMorgan Chase, Bank of America and Citigroup, have been confirmed or reported to be in various stages of developing stable or tokenized payment systems.
At the same time, crypto companies are expanding into the stablecoin payments stack. For example, Ripple is building an infrastructure aimed at supporting stable storage, settlement and treasury management for institutions.
related to: US regulator reviews guidelines for tokenized deposit insurance, stablecoins
