The Chinese Path to Risk Tokenization: A Preliminary Study of Catastrophe Insurance Risk Diversification Models

Linxin Yin and Weiyi Nie ()
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Linxin Yin: Central University of Finance and Economics
Weiyi Nie: Central University of Finance and Economics

A chapter in Proceedings of the 2026 4th International Conference on Digital Economy and Management Science (CDEMS 2026), 2026, pp 182-199 from Springer

Abstract: Abstract Against intensifying extreme climate events, China’s catastrophe insurance system faces a structural dilemma of “high losses yet low coverage”. Traditional catastrophe risk securitization helps diversify risks but is hindered by high issuance thresholds, long cycles, and slow claims, failing to cover the large long-tail agricultural disaster-affected population. As a digital upgrade, risk tokenization improves efficiency via smart contracts and parametric triggers, yet international models relying on public blockchains and stablecoins suffer from unclear legality, weak investor protection, and threats to monetary sovereignty, making direct import unfeasible. This paper analyzes the international platform Nayms and uses Hainan’s 2024 tilapia crisis triggered by Typhoon Yagi as evidence to explore a “compliant Chinese path” for risk tokenization balancing efficiency and financial security. It proposes and simulates the “Digital RMB Consortium Blockchain Catastrophe Bond Voucher” model: replacing USD stablecoins with digital RMB, anonymous public chains with regulatory consortium blockchains, and liquid tokens with locked vouchers. Smart contracts enable automatic payouts with regulatory circuit breakers, forming a “code plus human oversight” dual governance. This localized innovation retains global strengths including risk atomization, parametric automation, and T + 0 settlement while enabling full central bank monitoring to safeguard monetary sovereignty and compliance. It offers an exploratory paradigm for China’s “strongly regulated, efficient, and sovereign-controlled” fintech system under the socialist market economy.

Keywords: Risk tokenization; catastrophe bonds; risk securitization; smart contracts; digital renminbi; parametric insurance (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6239-699-9_21

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DOI: 10.2991/978-94-6239-699-9_21

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