Tabit Insurance, a regulated entity in Barbados established by ex-executives of the now-defunct cryptocurrency exchange Bittrex, announced that it has secured a $40 million reserve entirely comprised of bitcoin (BTC).
The company plans to offer traditional insurance and reinsurance services, having emerged earlier this year with intentions to provide liability policies backed solely by bitcoin reserves for corporate directors and officers (D&O). Tabit reportedly holds the distinction of being the first licensed insurer to utilize bitcoin reserves for conventional policies priced in U.S. dollars, under a class 2 license granted by the Barbados Financial Services Commission.
Key Takeaways:
- In January, Tabit indicated its intent to provide liability insurance policies in USD, secured by bitcoin reserves.
- The firm operates with a class 2 insurance license from the Barbados Financial Services Commission.
Tabit co-founder and CEO Stephen Stonberg highlighted how bitcoin holders can contribute their assets into a segregated reserve system that yields around 10% through non-custodial technology from Fireblocks. This model is reminiscent of how accredited investors, termed “Names,” allocate assets into insurance syndicates within London’s Lloyd’s insurance market.
“For a technology like crypto, you may need a new underwriter, but the way the insurance is done is fundamentally the same as before,” Stonberg remarked. “We are holding our regulatory capital in bitcoin, and I think bringing in a new capital source to the insurance industry and innovating with the balance sheet is an opportunity that others weren’t really looking at.”
This novel approach by Tabit illustrates the expanding intersection of cryptocurrency and traditional financial services, offering innovative solutions for using bitcoin in the insurance industry.
