Bitcoin life insurance company sees beauty in boring
Life insurance is boring, which is just what bitcoin needs, according to Zac Townsend, the CEO of Meanwhile.
Why it matters: Building classic financial services on newfangled digital assets is a road to building out crypto's original vision: An alternative financial system based on a monetary system that's not subject to the whims of politicians.
What they're saying: "Bitcoin has this culture of HODLing (a crypto meme for holding through price swings) and has this culture of long-term store of value, and that's really what life insurance is about," Townsend says.
How it works: Meanwhile is a life insurance company that does everything in bitcoin, while still offering tax advantages that customers might expect for products they're considering for estate planning.
- Speaking very broadly, a customer that gives Meanwhile 10 BTC can expect a beneficiary to receive 20 BTC after the customer dies (precise terms are subject to actuarial analysis, etc., but that's been a rough idea of the deal, here in the early days).
- Townsend called that price a "ballpark." The minimum buy-in, for now, is five bitcoin over five years (roughly $175,000).
To meet its obligations, the company runs a conservative credit desk, targeting a 3% return in bitcoin (2% is all it needs to pay death benefits).
- A selling point is that, over time, users can borrow against their benefit tax-free, Townsend explained.
The intrigue: "We accept all our premiums in bitcoin. We pay all our claims in bitcoin," Townsend says. "Because all our assets and liabilities are in bitcoin, the price of bitcoin doesn't matter."
- That raise reached a little over $20 million now, with Stillmark — a Bitcoin-focused fund — joining later, Townsend tells Axios.
- The company got its sandbox license with the Bermuda Monetary Authority at the end of last year. (Bermuda is a leading nation for domiciling insurance companies)
- "The way we talked to them about it was, 'We're going to build a boring life insurance company,'" he said.
Townsend declined to disclose numbers but says Meanwhile is selling policies. Right now, it's only available in the U.S.
- His goal is to offer it in places where saving is harder, such as Argentina, Zimbabwe and Nigeria.
Zoom out: The company runs with seven people now, but Townsend thinks a large insurance company can be built with low overhead by using artificial intelligence to do jobs like customer service.
The bottom line: "We have already worked on policies right now that are going to outlive me," he says.
Go deeper: Bitcoin ETF approvals are still no slam dunk