Tabit Insurance has revealed the successful capitalization of its $40 million insurance facility.
This fundraising announcement, made on Monday (March 24), was executed entirely in bitcoin, marking what Tabit claims is a first in the industry.
“The funding can be verified in real time by the company’s regulators and auditors, presenting a unique and innovative approach to transparency within the insurance sector,” stated Tabit in a press release.
With the market currently “priced at attractive levels” and other capital sources increasingly contributing to capacity, Tabit asserts that its use of bitcoin “provides a groundbreaking source of capital” for the insurance industry.
The announcement emphasized that although the capital is held in bitcoin, the company’s insurance policies and premiums are all expressed in U.S. dollars.
“Our approach to capital allocation demonstrates our confidence in offering stable support to our partners,” remarked William Shihara, co-founder of Tabit. “By merging the strength of traditional balance sheets with strategically selected assets like bitcoin, we are positioned to adapt to market changes and better meet the needs of the insurance community. This solution provides a regulated dollar return, which we are eager to realize on an alternative asset class like bitcoin.”
The release noted that the $40 million capital can be verified on the blockchain “in a manner akin to proof of reserves,” delivering a level of transparency beyond what is typically available through quarterly disclosures and enabling ongoing supervision by regulators in Barbados, where Tabit is headquartered.
In related digital asset news, PYMNTS reported last week about the challenges businesses encounter when utilizing stablecoins. As outlined in that report, the absence of standardized disclosures regarding reserve compositions can obscure the actual support of stablecoins. Reserves that consist of less liquid or riskier assets may fail to provide the stability users anticipate, particularly during tumultuous market conditions.
“The short answer is … Stablecoin deposits lack protection from any government-backed institutions. Some coins, such as USDC, claim a 1:1 backing with reserves like cash or short-term treasuries, but the reality is significantly more complex. Certain stablecoins also include commercial paper or other financial instruments in their reserves,” explained Lissele Pratt, co-founder at Capitalixe, in an interview with PYMNTS.
“The associated risk falls on the issuer. If issues arise, as in the case of TerraUSD, users can find themselves at a loss, and regulators often intervene too late to mitigate considerable losses. This is why trust in the issuer is essential, yet, as recent events have illustrated, trust can be quite fragile,” Pratt added.
