Tabit Insurance Raises $40M From Bitcoin-Denominated Funding Round

The fundraise, announced Monday (March 24), was provided entirely in bitcoin, which Tabit says is an industry first.

A startup specializing in providing insurance services to U.S. companies has announced the full capitalization of its $40 million insurance facility, funded entirely in bitcoin.

This marks the first time a U.S. insurance company has used bitcoin to capitalize an insurance facility.

The fundraise was completed with a single investor and is capable of being viewed in real time by the company’s regulators and auditors, offering a distinctive and novel approach to transparency for the insurance industry, Tabit said.

With the market currently priced at attractive levels and alternative capital sources increasingly serving as a source of capacity, Tabit’s use of bitcoin provides an innovative source of capital for the insurance sector.

While the capital is held in bitcoin, the company’s insurance policies and premiums are all 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 $40 million in capital is capable of being viewed on the blockchain in the manner of proof of reserves, offering greater transparency than would be found with the company’s quarterly disclosures and allowing for constant oversight by regulators in Barbados, where Tabit is based.

In other digital asset news, PYMNTS last week wrote about the risks businesses face by turning to stablecoins. As that report said, the lack of standardized disclosures around reserve compositions can mask the true backing of stablecoins. Reserves comprised of less liquid or higher-risk assets may not be able to deliver the stability users were expecting, especially during periods of market volatility.

“The short answer is … Stablecoin deposits aren’t protected by any government-backed institutions. Some coins, like USDC, claim to be backed 1:1 with reserves like cash or short-term treasuries, but the reality is much more complex. Some stablecoins also include commercial paper or other financial instruments in their reserves,” Lissele Pratt, co-founder at Capitalixe, said in an interview with PYMNTS.

“The risk of this is that it falls on the issuer. If something goes wrong, like with TerraUSD for instance, users are left holding the bag, and regulators usually step in too late to prevent significant losses. This is why trust in the issuer is crucial, but as recent events have shown, trust can be a fragile thing,” Pratt added.