Tabit Insurance Unveils $40 Million Funding Focused on Bitcoin

The capitalization of Tabit Insurance’s insurance facility, worth $40 million, has been announced.

The fundraising effort, which Tabit says is a first in the industry, was conducted entirely in bitcoin and announced on Monday (March 24).

“The company’s regulators and auditors can verify the funding in real time, marking a distinctive and novel approach to transparency for the insurance industry,” Tabit said in a news release.

Tabit points out that with the market currently “priced at attractive levels” and alternative capital sources increasingly contributing capacity, its use of bitcoin “provides an innovative source of capital” for the insurance sector.

The release further noted that although the capital is held in bitcoin, the company’s insurance policies and premiums are denominated in U.S. dollars.

“Our approach to capital allocation underscores our confidence in providing a steady hand to our partners,” said William Shihara, co-founder of Tabit. “By combining traditional balance sheet strength with carefully chosen assets like bitcoin, we’re able to stay responsive to market shifts and better serve the insurance community. This solution offers a regulated dollar return which we’re excited to earn on an alternative asset class such as bitcoin.”

The report states that the $40 million capital can be verified on the blockchain “in the manner of proof of reserves,” providing more transparency than quarterly disclosures and enabling continuous monitoring by regulators in Barbados, where Tabit operates.

In other news regarding digital assets, a report from last week detailed the dangers that companies encounter when they resort to stablecoins. The report indicated that the absence of standardized disclosures regarding reserve compositions can obscure the actual backing of stablecoins. During times of market volatility, reserves consisting of assets that are either more illiquid or riskier may fail to provide the stability that users anticipated.​

“In brief, the answer is … There are no government-backed institutions that protect stablecoin deposits. Coins such as USDC assert a 1:1 backing with reserves like cash or short-term treasuries, but the actual situation is far more intricate. In an interview, Lissele Pratt, co-founder at Capitalixe, stated, “Some stablecoins also include commercial paper or other financial instruments in their reserves.”

“This entails the risk of it being shouldered by the issuer. When things don’t go as planned, such as with TerraUSD, users end up shouldering the consequences while regulators often intervene after the fact, making it impossible to avert serious losses. Pratt added that this is why trust in the issuer is essential, but recent events have demonstrated that trust can be easily broken.