{ "episodeId": "SLP662", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "zac_townsend": { "name": "Zac Townsend", "role": "guest", "tag": "ZAC" } }, "segments": [ { "speaker": "stephan", "time": "00:00", "start": 0.16, "text": "Will Bitcoin replace fiat in insurance? I, I think that the answer now, in five years, in ten years, like, might be different than what I think the answer will be in fifty or sixty years, which is that Bitcoin will probably, you know, reign supreme. So for those people, again, having this like global decentralized store of value that is Very unlikely to be debased or like at least cannot be debased for political reasons or currency risk reasons or inflation risk reasons. I think that's incredibly powerful." }, { "speaker": "zac_townsend", "time": "00:43", "start": 42.78, "text": "Hi everyone, welcome back to Stephan Livera podcast brought to you by Bold. American listeners, you can buy Bitcoin at getbold.io. Now, we're gonna- We'll be talking about Bitcoin life insurance, and I think this is an interesting topic for a lot of people because this could be a big market that's being disrupted by Bitcoin and Bitcoin companies. Rejoining me on the show today is Zac Townsend, CEO and co-founder of Meanwhile. Zac, welcome back to the show. Happy to be here. Thanks" }, { "speaker": "stephan", "time": "01:08", "start": 68.02, "text": "for having me again." }, { "speaker": "zac_townsend", "time": "01:09", "start": 68.78, "text": "So, Zach, I think, I know, I guess the recent news on your side is that you had a forty million dollar round raise. So, just give us a bit of an overview what happened there?" }, { "speaker": "stephan", "time": "01:17", "start": 77.48, "text": "Yeah. well, you know, we had a really good twenty twenty-four, and Bitcoin had a really, really good early twenty twenty-five. and those things combined, you know, we went out to talk to a bunch of investors, there was a lot of enthusiasm for what we're doing." }, { "speaker": "stephan", "time": "01:37", "start": 96.82, "text": "Excitement that the Bitcoin economy is getting bigger and that it's institutionalizing. I think we have a very sort of, you know, boring institutional product, and I think that aligned with the times, so there's a lot of excitement, and I think we're very fortunate we ended up with two co-leads, equal co-leads, from very different parts of crypto, slash Bitcoin. So, one is Folger Ventures, which is just an amazing- Amazing firm, one of the, I think the best firms right now doing growth stuff in Bitcoin. You know, they did Blockstream, Signum Bank, did US, their Bitcoin Maxi's, Bitcoin All the Way, and, you know, really believe in like building a Bitcoin economy and what life insurance, can do for that. And then on the other hand, we, got, Framework Ventures as a co-lead, which is a different type of firm. They're actually in- More of a DeFi firm, they, you know, we're big investors in Ave and Chainlink and that sort of stuff. I think they're very excited about, you know, traditional financial products, getting, you know, digitized, put into digital money. They in fact don't do a ton of, Bitcoin products, but I think we're really aligned with us that Bitcoin is a store of value, much more than, than, basically everything else I said. So we- We, and our policy holders, our users come from those different worlds, right? They like are making the decision to buy our policy, and they range from Maxies to, you know, I don't know, D-gens. so we were really excited to get the two of them together, to co-lead the round. And then the only other person that we made space for in the round was Wences, oh, I'm sorry, I'm sorry. Who, founded Zappo Bank, but is like the original, like, Bitcoiner in Silicon Valley, sort of well known as like Patient Zero in Silicon Valley, yeah, is what people call him. Yeah, so we're, we're, really happy and what's this is a great guy, very helpful and a good mentor to me and the company." }, { "speaker": "zac_townsend", "time": "03:51", "start": 231.11, "text": "And so one interesting thing you were touching on there is, you know, the perception that people might have of life insurance is like, oh, it's this stodgy old kind of trad-fi legacy thing, but then of course, bringing in Bitcoin, it can be like a very disruptive thing to that. So can you, explain why is it that doing a Bitcoin form of life insurance makes- Makes it more disruptive." }, { "speaker": "stephan", "time": "04:15", "start": 255.27, "text": "Yeah. Well, if you actually think about like what life insurance is, it's basically saving for your kids or saving for your retirement. So there are different like versions of the products that do different things, but fundamentally it's about long-term savings and protection. And for us, there's a fundamental alignment both with what Bitcoin is, which is a global decentralized store of value outside the control of any government. so actually even separate from whether you think- Bitcoin's going to appreciate a ton in purchasing power over time, which we do. But even if you put that aside, we think that this, just Bitcoin as a currency, as a store of value, is like fundamental, and life insurance is like quite aligned with that. And then there's also just this culture, I mean, this culture of like hodling, intergenerational wealth transfer, you know, retire your bloodline, and all of that. And that is basically what life insurance is about, right? It's about saving for your kids and saving for their kids. so for us, there's just incredible- Like it all sort of fits together. but yeah, sometimes I think Bitcoiners are like life insurance, that's a little boring and crazy and stupid, But one thing that's happened is that a lot of, you know, you're an example, I think I'm an example, there are many examples of people, you know, you're buying Bitcoin twenty, thirteen, fourteen, fifteen, sixteen, in your twenties or thirties, and now you're thirty-five, you're forty, you have a serious girlfriend, you're getting married, you're having a kid or two, so I think the idea of life insurance, doesn't sound quite as crazy anymore, as it might have, you know" }, { "speaker": "zac_townsend", "time": "06:06", "start": 366.38, "text": "Yeah, totally fair. And I think, when people, are moving through the world when they're younger, they think they're invincible, they're gonna live forever, and then actually, you know, as we start to get to closer to forty, then, yeah, it is time to start thinking about these things. Yeah, a" }, { "speaker": "stephan", "time": "06:20", "start": 380.12, "text": "little creak in the back, you're like, \"Wow, maybe, maybe this isn't forever.\"" }, { "speaker": "zac_townsend", "time": "06:24", "start": 383.94, "text": "So I guess one thing that can be really disruptive there is just the fact of Bitcoin denomination. So what problem does Bitcoin denomination solve that TradFi or traditional fiat life insurance cannot solve?" }, { "speaker": "stephan", "time": "06:40", "start": 399.51, "text": "Yeah. Look, the fundamental problem we started with is if you're like a middle class or above person in Argentina or Nigeria or Turkey, you just simply don't buy life insurance, you don't save for your retirement because, like, you're gonna live longer than the Argentinian peso. So it just doesn't make sense to buy a financial product for your kids. so for those people, again, having this like global decentralized store of value that is very unlikely to be disrupted Debased or like at least can't be debased for political reasons or currency risk reasons or inflation risk reasons. I think that's incredibly powerful. And that is a story that resonates, you know, even with people in the US or people in developed countries, you know, if you bought a million dollars of life insurance coverage in twenty twenty, you've seen your purchasing power go down Twenty or thirty percent because of inflation. It like literally isn't the policy you bought. and although, and if you bought it in Bitcoin, we didn't exist five years ago, but if you bought it in Bitcoin, you know, obviously you've, you've seen your purchasing power go up. I mean, might depend on like the month, but you know, like a hundred percent, two hundred percent over time. Now, maybe the price of Bitcoin in the like decade over decade I think will become less volatile over time, but I think what's important is that it will become, it will persist as a like relative store of value and its ability, and its ability to be used to, you know, purchase things. and that's why we think it is- Like literally better than, than fiat life insurance." }, { "speaker": "zac_townsend", "time": "08:19", "start": 499.25, "text": "Yeah, and, as, Matthew Mcginneski points out from PwCopolis Economics, he does this quarterly base money review, and I, I believe, last I checked, it's about twelve percent per year. That's how much fiat inflation there is in the, you know, i-if you're looking at base money. And so it's just absolutely, you know, people don't realize- Yeah, the other way of saying that is you're losing" }, { "speaker": "stephan", "time": "08:40", "start": 519.99, "text": "twelve percent of the value every year." }, { "speaker": "zac_townsend", "time": "08:42", "start": 522.37, "text": "Exactly, yeah, and so They are just losing so much value and they don't understand. Now of course, Bitcoiners are, are thinking about this, but even many Bitcoiners may not have truly kind of internalized some of these ideas, especially if you're newer in the Bitcoin world, maybe you've only kind of come in, you know, in the recent cycle or whatever. but I, I think once you've really internalized this idea that your national currency may not outlive you, right? That you, you know, and so- I guess I'm curious to get your perspective. Will Bitcoin replace fiat in insurance?" }, { "speaker": "stephan", "time": "09:15", "start": 554.61, "text": "Oh, that's interesting. I think in life insurance, it really does make sense, because- You're really saving for yourself or your kids or whatever. insurance more broadly is difficult, like, it, it, it's weird to contemplate having car insurance in Bitcoin until you can pay your mechanic in Bitcoin. so I think that is a little more dependent on whether like day-to-day transactions are happening in Bitcoin or Lightning, which I think is possible, but I tend to think of- What'll definitely happen is like Bitcoin as settlement layer, like Bitcoin as like, you know, reserve currency, like central store of value. And in that sense, I don't know why you'd have a life insurance policy in anything else. now there may be a very long transition from now to then. So, if, if you took me for example, I, was the first policyholder of our company. you, you gotta, you gotta do that. I really believe in what we're doing. A lot of my Bitcoin wealth is inside the company, but also, you know, I have a dollar mortgage on my house, and I have a dollar term life policy so that if I, you know, get hit by a bus tomorrow, my wife can pay off the mortgage. so I, I think that the answer now, in five years, in ten years, like, might be different than what I think the answer will be in fifty or sixty years, which is that Bitcoin will probably, you know, reign supreme." }, { "speaker": "zac_townsend", "time": "10:47", "start": 647.48, "text": "So can you just give people a brief overview, people might- I don't know if you've heard the first episode and stuff. Yeah, yeah. Just like a brief overview in terms of how it works. Like, let's, let's take that example you said, like, let's say it's a thirty-five year old guy, he's a hodler, he's been hodling for a while, and he wants to take out a policy. What does it look like? How many Bitcoin is he putting in? How many Bitcoin does he get out? What's the rough" }, { "speaker": "stephan", "time": "11:10", "start": 669.85, "text": "view? Yeah, yeah, yeah. It, it actually sort of depends on" }, { "speaker": "stephan", "time": "11:20", "start": 680.34, "text": "Exactly what you're trying to do. But the core product right now, which is mostly bought by, you know, Americans and Canadians and people in the UK, is what's called-- it's a whole life product, so it lasts your whole life. and since you will, as you mentioned, eventually die, hopefully in a very long time, but you will eventually die, your kids or wife or loved ones or niece and nephew, whatever your beneficiaries will receive a payout. So it lasts your whole life. and then what? But we, the fundamental arrangement is like you pay us in ten equal installments over ten years, and then there's a fixed guaranteed payout. So for your thirty-five, healthy thirty-five year old? it is like a ratio of what you put in to what you put out. The smallest policies we do are one Bitcoin paid over ten years, so that's a tenth of a Bitcoin a year for ten years. The biggest policies we do are about thirty Bitcoin, so three Bitcoin a year for ten years. and then you can expect about one point five times for a thirty-five year old as you put in, right? So if you put in ten Bitcoin, the, death benefit's fifteen. If you put in one, it's It's one point five, you put in thirty, it's, forty five. and the reason we cap it, by the way, we've actually had users who've come to us and said, \"Oh, can we, can I buy a thousand Bitcoin policy?\" And we're like, \"No, because if you get hit by a bus, we're screwed, right?\" So you need to like have enough sort of calibrate how much risk you're willing to take on any, any one person. but that's the core policy, and then for international folks," }, { "speaker": "stephan", "time": "13:06", "start": 785.89, "text": "We have what's really a simpler policy, which is a single premium policy, which is you might just pay one and get, you actually get a little more there, right? 'Cause you're not paying overtime, so you like pay one and you get one point seven or you pay ten and you get seventeen or something like that" }, { "speaker": "zac_townsend", "time": "13:21", "start": 800.78, "text": "upfront contribution, yeah, one time and then the life or the reason you don't wanna do that in" }, { "speaker": "stephan", "time": "13:26", "start": 805.59, "text": "the US is one of the, or Canada or the, one of the big benefits in certain jurisdictions is that you can borrow value out of the policy tax free. but then there are a bunch of rules in the internal revenue code in the United States about like what has to be true about the policy to let you do the loan, but if you're, you know Live in Hong Kong or Singapore or whatever, you aren't really buying the policy for that purpose." }, { "speaker": "zac_townsend", "time": "13:54", "start": 834.05, "text": "Gotcha," }, { "speaker": "stephan", "time": "13:55", "start": 834.53, "text": "okay." }, { "speaker": "zac_townsend", "time": "13:55", "start": 835.29, "text": "Yeah, and so- The obvious question most people will have, and we, we touched on this last time as well, but the obvious question will be, where is the yield coming from? how do I-- how does, how does the customer know that it's, you know, it's-- Yeah. That there's gonna be some sustainable yield being generated? Obviously, we're a little bit further away from the block size and the FTXs of the last cycle, so I think people are a little bit more sort of confident that Bitcoin is gonna be here. The most" }, { "speaker": "stephan", "time": "14:20", "start": 860.21, "text": "important thing about the business and like what people should There's a really practical answer about like, what do we do with the money? What we primarily do with the money today is a mix of two things. The first is actually a different tax arm, which has no credit risk, which is we do these long dated, repurchase agreements, repos, which is as simple as, it's basically a tax basis trade, and this is a, again, just a result of how Bitcoin is treated as a like commodity rather than a currency. Currency, in most tax regimes. So the way this trade works is someone, gives us a hundred, I'll just use ex-big numbers, yeah, someone, pays us a hundred Bitcoin But that is low basis Bitcoin, right? They like mined it or they bought it a long time ago, and then we give them ninety seven Bitcoin, but that is high basis Bitcoin. Now what they do with it, they have to have some theory about how they're making more than three percent returns in Bitcoin. I don't have to have a theory about that. sometimes people have done this and they like pivot into micro strategies, or they go do crazy stuff on LBTC and Pendle, or they, You know, whatever they wanna do, it's just whatever they wanna do something that's taxable. and so that trade is amazing for us 'cause it has no credit risk. 'Cause I have my hundred bitcoins sitting in a wallet, and they've got their ninety-seven bitcoins, so they don't have to trust us that much. and this is-- so we call this a parity, repurchase agreement. That is actually probably seventy percent of our balance sheet right now, and is an amazing way to get yield. And the reason we're a great counterparty on that trade is when we say we can be across from you for a year or ten years or twenty years. Years, they believe that because we're a life insurance company. So that's like a core, a core thing we do. Now that won't be sustainable like forever, that is like- Genuinely an arb. so what we also do is, as I said, we believe that Bitcoin is going to be the economic system of the world, and if it is the economic system of the world, it is going to have capital markets and it is going to have debt capital markets. And, there's a pretty robust, like, overnight lending market in Bitcoin, a one-month funding market in Bitcoin, but that is very much like lending money to traders to do stuff. We, I think, are one of the few, if not the only, institution that lends to institutional counterparties for terms like a year or two years. we don't really go beyond that. And then we're negotiating, Credit agreements, right? So th-these are like hundred page legal agreements with covenants and seniority and collateral, and we basically can provide something no one else does with this, with this duration, right? Because our users are trusting us with their Bitcoin for decades, we can trust people with Bitcoin if we trust them, which we say no to almost everyone. We can trust our in investment counterparties with Bitcoin for like a year, and there just isn't other people who are doing that. and what we get in exchange for that duration is like tons of credit protection or extra collateral, because to your point about FTX and BlockFi and Celsius and Luna, when those things happen, the world like is blowing up, right? And crypto land, like gets very volatile, and the over- Lending markets disappear. So if you think about a big institution like, I'm not saying these are customers, although some of them are, if you think about like a Coinbase or an Anchorage or a Galaxy or a Falcon X or a Cumberland or a Jane Street or Citadel or whatever, they will pay and give the credit protection, to know that there's a certain amount of Bitcoin on their balance sheet that's not Gonna get margin called, you know, isn't like that liquidity is there no matter what. so that's what we do, again, with the minority of our balance sheet, but, you know, over time, we wanna do more. And, and by the way, I think that we won't be the only one here. Like, we believe, again, Bitcoin is an economic system, there'll be a yield curve in Bitcoin. You should be able to, like, read in the Wall Street Journal, like, what's the price to borrow Bitcoin for a year, That's the only way it's a functional currency that can also like be the settlement layer for oil shipments and, you know, things like that." }, { "speaker": "zac_townsend", "time": "19:20", "start": 1160.35, "text": "Yeah, and I agree, many of these things are eventually coming and some of them are here now, but it's, you know, it's just early days, relatively speaking. But I will say one thing" }, { "speaker": "stephan", "time": "19:30", "start": 1169.56, "text": "is that can be tough for TradFi to get their heads around is like the yields are low. Right? I, I would sort of say like the risk-free rate on Bitcoin is, is low, right? Very low. so we target about 3% returns, in Bitcoin terms. And Sometimes you're talking to a TradFi person, they're like, \"Wait, like, you know, we target ten percent returns in our private credit funds.\" I'm just like, \"There, every ten percent return in Bitcoin is either high risk or a scam, right?\" So we are like down low, that's why it's like, we promise our users fifteen to ten. If you actually do the math, that's only like maybe a two percent return every year between now and like when you're gonna die. But those are, that's the The return we're comfortable guaranteeing, because that's the, that's the right and appropriate risk level for an insurance company." }, { "speaker": "zac_townsend", "time": "20:29", "start": 1229.18, "text": "Back to the show in a moment. This show brought to you by CoinKites dot com, the creators of the best Bitcoin hardware security devices, such as the Coldcard Mark IV and the new Coldcard Q. Now, we use Bitcoin hardware security devices to keep our keys offline, our private keys offline. Now, the way these work is you can do that setup Up, write down your twelve or twenty-four words on the, the seed word cards and keep that secure. Now you can use this device to interact with the Bitcoin network using software such as Sparrow Wallet, Electrum, or Vector Desktop or Nunchuk as a few examples. Now you have a range of security features that you can use with these devices such as passphrases, you can use seed xPub or my favorite is multi-signature. Now if you're starting in a basic way, just start with the device And the USB-C cable, plug it directly to the computer and use it that way, and then later improve your setup. But I believe these devices are great at helping secure your coins, especially as you start to migrate up into multi-signature security. But don't be disheartened or don't be, scared away. They are accessible, and I think you actually do learn about Bitcoin in the process. So to get yours, go to coinkite dot com, use code Livera to get a discount on your cold card. This episode brought to you by Galloy. They are building banking software For the Bitcoin age. So if you are with a bank, a fintech, or a startup looking to offer some kind of Bitcoin product, whether that is a Bitcoin collateralized loan, deposit accounts, or payments, Galloy can help you. Their latest product is called LANA. It is a loans management platform, and you can use this to come to market quickly and offer a loans or Bitcoin collateralized lending product for your customers. Now, Galloy have a lot of experience in the space. They started with Blink Wallet in twenty twenty, and they've since- Grown this to become a community favorite over time, and so they have a lot of experience making things work in a secure, reliable, and scalable way. So if you need assistance coming to market quickly with a Bitcoin banking product such as lending or deposits or payments, talk to the team at Galloy. You can email them, the email is biz at galloy dot io, or go to the website galloy dot io. And now back to the show. Yeah, yeah, makes sense, as I understand it. And so the other big thing that, let's say the, your end user will be interested in, of course, we were touching on this earlier, is the tax advantages, the financial flexibility. you know, some people, as you, as we were joking about before, you know, retire your bloodline or whatever. and so could you spell out a little bit about what it looks like for people who actually want to, let's say, become a customer of Meanwhile, put in some Bitcoin, have a life Does it look like, what are the costs of that, and why is that tax advantageous?" }, { "speaker": "stephan", "time": "23:20", "start": 1399.65, "text": "Let me start with a very end question, which is like, why are there tax advantages for life insurance? And fundamentally, life insurance is about like, what happens to your family if you die before you're supposed to? And there's another product which is annuity, and an annuity is sort of the inverse. It's like, what happens to your family if you live longer than you're supposed to? and, you know, societies, governments have decided that We don't want orphans and widows to starve. So it would be better if everyone like took out life insurance. if you think about like, yeah. So that, that, that's the like fundamental reason that there are these tax benefits. And then like any reasonable tax benefit, it is then, you know, used to an extreme, and this is like one of the ways that, you know, high net worth, ultra high net worth individuals like- You know, it's one of the tax structures they used, in, you know, in their toolkit. So, the way it works is, to go back to my example, you've put one Bitcoin in the policy a year for ten years. In m-m again, most jurisdictions, if you were trying to churn ten Bitcoin into fifteen Bitcoin yourself, getting three percent yields, you would owe interest income every year So in that way, it's like a tax-- there's tax-free compounding in the account. We get further than you could, in how we're turning that ten into fifteen, because we don't have that intermediate like annual tax. That's one. The second is, the beneficiary receiving the payout doesn't pay any taxes, so it's tax-free in that sense. The third thing is, as you said, you can borrow against the- policy. And what's amazing about that is you like put ten Bitcoin in, now it's year fifteen, it's year twenty, Bitcoin's gone up to a million dollars a coin or ten million dollars a coin, whatever you think it's gonna be, you can borrow a Bitcoin back out from us. But under the rules of most countries, that's like a new tax base as Bitcoin. So you don't-- wouldn't owe any capital gains tax between like today and when you borrow out that Bitcoin. So that, you know, we actually have some policyholders who don't even yet, you know, have a way for kids, and the reason they're doing it is because they see like, okay, if I, I even with my big, I have a bit, a stack I have a portion of it in this policy because if I need to liquidate any of my Bitcoin, this should be the like part I liquidate. And then what's great about that loan is it's denominated in Bitcoin. And we also-- but we just fundamentally don't expect you to pay the loan back. We expect you to eventually die, and the loan is netted against the amount we owe you, right? So you've put in ten And then you, I don't know, borrow out five or, four, and then when you die, your kids are supposed to get fifteen, but instead they get eleven, because you've, like- You spend some money, I'll" }, { "speaker": "zac_townsend", "time": "26:31", "start": 1590.53, "text": "pay for that for you, yeah. Yeah, gotcha." }, { "speaker": "stephan", "time": "26:33", "start": 1592.67, "text": "And the only, the last thing I'd say, one is there is like fundamental protection, right? Like you could just get hit by a bus and then your kids get fifteen Bitcoin, so like that's at the core of the reinsurance product. And the last thing I think we're realizing, recently This wasn't really a pitch we were leaning into, is Bermuda, like why? Bermuda is just well known, which is where our life insurance company is. Bermuda is just well known for being a stable jurisdiction, for being offshore, and also having incredible asset protection and privacy rules. So I think as- We can debate whether this is good or bad, but as like the perception of political stability has gone down over the last year, we're seeing inbound policyholders from places that there's no tax benefit, right? Like if you live in Dubai, like there's no tax benefit. But maybe the idea of having some of your Bitcoin like domiciled in a regulated Bermuda entity sounds Pretty good. And it certainly sounds pretty good for some Americans, some people in Hong Kong, you know, depending on where you are in the world. so that's also becoming a bigger and bigger piece of the value proposition that, that users see. I see," }, { "speaker": "zac_townsend", "time": "27:55", "start": 1675.06, "text": "yeah. so yeah, just recapitulating a few of those points, as you said, you get to compound tax-free, so that's cool, government benefit there or government, tax concession there. the, you know, when you die and your, your wife gets your payout, it's tax-free for her, so that's good. And then thirdly, this borrowing com-component as well. So, and then I guess one other question, let's say the thirty-five, the hypothetical thirty-five year old enters into this policy and he's putting in But let's say he actually dies at forty, what happens then? Like if he's only done, let's say, five years of contribution. Oh, you get the full amount." }, { "speaker": "stephan", "time": "28:29", "start": 1709.3, "text": "Whenever you die, even if you've-- if you give us the one Bitcoin and you die a week later, your, your beneficiaries get fifteen. There's a bunch of like actuarial math about that. I joke though that, other than like you and your family, no one wants you to live longer than we do. So our, our incentives are aligned." }, { "speaker": "zac_townsend", "time": "28:51", "start": 1730.78, "text": "Right, right, because, because the longer the, customer lives, the longer you get to compound and therefore you kind of-- And you get to use, do, do your, as you said, the debt capital markets operations, the tax basis trade and these kinds of things, so you can kind of make more money on that side. Overall, I would" }, { "speaker": "stephan", "time": "29:05", "start": 1744.83, "text": "say selling- Life insurance to thirty-five-year-old crypto folks who are, often obsessed with longevity, you know, is a pretty good business plan." }, { "speaker": "zac_townsend", "time": "29:18", "start": 1758.36, "text": "Right, right, because now that seems to be the big, this whole Brian Johnson thing. I mean, I'm maybe a little skeptical of that stuff, but, you know, hey, people do whatever, it's your life, it's your body, go for it. but, yeah, I'm calling up our" }, { "speaker": "stephan", "time": "29:31", "start": 1770.57, "text": "policyholders, telling them they should, weightlift, but if you're listening, you know, it," }, { "speaker": "zac_townsend", "time": "29:38", "start": 1777.77, "text": "Yeah, that's right. So, you know, a, a, a lot of people on, you know, Bitcoin Twitter or Bitcoin X will be on about, I don't know, red light or sunning this and the other and, you know, eating meat and lifting and, you know, yeah, okay, so- One other topic I'm curious about, because we're in the age now of Bitcoin treasury companies, and the funny thing with that, as Michael Saylor says, \"Volatility is vitality.\" but I guess I'm curious from your perspective as a business, meanwhile Are you trying to, let's say, minimize Bitcoin volatility because you're trying to be like stable, whereas like the other aspects of this Bitcoin world, they're sort of chasing the volatility? I'm curious how you see that." }, { "speaker": "stephan", "time": "30:20", "start": 1820.29, "text": "It's interesting, we're neither of those things. We're like completely ambivalent." }, { "speaker": "zac_townsend", "time": "30:25", "start": 1824.72, "text": "Yeah." }, { "speaker": "stephan", "time": "30:25", "start": 1825.14, "text": "Or just indifferent. So we run our entire business in Bitcoin. So we take premiums in Bitcoin, we pay claims in Bitcoin, and then we do all the insurance stuff in Bitcoin. So our audited financials are stated in Bitcoin. I think we're the only company in the world for which that's true. Our reserves, our capital, our solvency calculations, our regulatory filings are all entirely in Bitcoin. So what's nice about that is if I showed you our balance sheet, you know, it-- there's assets and, you know, there's like a number and there's liabilities and the-- and it's all, but that number isn't Bitcoin. So if the price of Bitcoin is at a hundred thousand, it's at eighty-five thousand, in the course of running this company, actually, you know, it, it like, is that sixteen thousand five hundred, it just doesn't matter to us. I mean, it matters in the long term, right? And like we one hundred percent believe that it's going to be more valuable in the future, but by the future, I mean ten years, twenty years, thirty years, forty years, not, you know, ten days, twenty days, thirty days, forty days, which I have no" }, { "speaker": "stephan", "time": "31:37", "start": 1897.2, "text": "Volatility in the way those treasury companies do, but we're like genuinely don't care. I would say just, there is a big difference between us though, I have a lot of respect for what Strategy's done and Twenty One and, you know, David Bailey's new company, but fundamentally, like, we- We have income in Bitcoin. We actually have true Bitcoin yield, like we have a return on equity, like we're running a business for the world we want to see, which is a world based on Bitcoin. We aren't running a business trying to financial engineer the relationship between dollars and Bitcoin." }, { "speaker": "zac_townsend", "time": "32:21", "start": 1941.42, "text": "Yeah, I think that's a good ex-- it's, it's a good answer. I agree because, it's, you know, in the Bitcoin world, the Bitcoin economy, people talk about these different network effects, right? Like there's maybe the users and the miners and the developers and the exchanges and, you know, media and, you know, Bitcoin treasury companies are arguably part of that too because they're kind of, yeah, reinforcing this Bitcoin network effect. But the interesting thing from your perspective is because you're Bitcoin-denominated You aren't maybe, I mean, it's like the fiat world obviously still impacts you, right? Like if the Bitcoin price drops dramatically tomorrow, we would, we, we would all be impacted by that, but obviously We're all here because we're bullish on Bitcoin, otherwise we wouldn't be here, right? And so, I guess that helps you, let's say, alleviate some of that concern of having to, yeah, sort of traverse the fiat world as much." }, { "speaker": "stephan", "time": "33:15", "start": 1995.02, "text": "Yeah, look, I, one thing that's been great for our business, which is from fiat land, is you got Blackstone and Fidelity out there saying that everyone should put one percent of their retirement savings in Bitcoin. and I guess what I believe is that it'll be one percent and then ten percent and then, you know, twenty percent all the way up. But what's going to happen in my belief is not that that will all just sit in Bitcoin. But back to capital markets, there'll be gradations of risk, that you might wanna take with your Bitcoin, and you'll have a life insurance policy, and you might have some, investments in miners, or, as I said, maybe, you know, Abu Dhabi and, Australia are settling oil futures nominated in Bitcoin. Like there'll be a whole economic system based on this global store of value and- Then we won't even really talk about investing in Bitcoin. We'll talk about investing in the things we invest in now, equities and bonds and venture capital and projects. It's just that instead of- At the end saying like, \"Oh, this is a five million dollar investment or a fifty thousand dollar investment,\" we'll be saying like, \"Oh, that's a, whatever, a five hundred thousand satoshi investment when the, this and that.\" Yeah." }, { "speaker": "zac_townsend", "time": "34:46", "start": 2086.01, "text": "Yeah, I think that's, that's probably, that's, that's the world we're moving towards, and definitely you're kind of front-running that in a sense by just being Bitcoined on the from the start. Yeah, like it's gonna be-- and, and I agree, I think it's, it could be twenty years before we're even, you know, close to hyperbitcoinization. So, you know, that, that's at least that's how I see it. I, I don't know, I could be" }, { "speaker": "stephan", "time": "35:12", "start": 2111.87, "text": "wrong completely. No, no, right. Yes, we're building" }, { "speaker": "zac_townsend", "time": "35:16", "start": 2116.11, "text": "for" }, { "speaker": "stephan", "time": "35:16", "start": 2116.21, "text": "that world." }, { "speaker": "zac_townsend", "time": "35:17", "start": 2117.44, "text": "Yeah. And then, I guess, out of curiosity as well, if you're older, you pay more, right? Because you're-- or how does that work normally?" }, { "speaker": "stephan", "time": "35:28", "start": 2128.27, "text": "Yeah, that's right. You either, you can either think you pay more or you, your ratio's lower, right? So we actually have a couple policyholders who are like, you know, I don't know, in their 60s, and then the numbers can start feeling Less amazing, right? So you put in ten Bitcoin, you get eleven and a half. But that's just the math of like the distance between their age and their expected mortality. Actuarial life table, yeah, yeah. so" }, { "speaker": "stephan", "time": "35:59", "start": 2159.17, "text": "Yeah, we have some of those users, but fundamentally most of our users, as I said, are like thirty to fifty-five year old men somewhere between serious girlfriend and two children." }, { "speaker": "zac_townsend", "time": "36:11", "start": 2171.04, "text": "The lead sponsor of this show is Bold, the best place to buy, sell, and save Bitcoin. For listeners in the US, Bold lets you secure your financial future with complete peace of mind by integrating a low fee Bitcoin only brokerage with next gen multi-sig vaults. With Bold, you can smash buy Bitcoin or set a DCA plan Plan for only zero point nine nine percent fees and seamlessly deposit the Bitcoin direct to your Bold Vault. The Bold Vault is a two or three collaborative multisig where you hold two keys and Bold holds one as a redundant backup, protecting against loss or theft. You can use Trezor, Ledger or Coldcard hardware wallets to spin up a Bold Vault in just a few minutes, and the Bold Vault is the only collaborative custody vault available with zero monthly fees. They're also offering zero fees on your first ten thousand dollars of Bitcoin buys and twenty five dollars of free Bitcoin. When you buy a hundred dollars of Bitcoin or more, try Bold today and upgrade your stacking experience over at getbold dot io. And now, back to the show. Yeah, it's interesting because, that's kind of a very typical-- and even for me, when I look at, let's say, my podcast download stats, it's often that's the demographic. Yeah. Or when I go to Bitcoin conferences and/or I go to Bitcoin meetups, again, that's the demographic. These are the people I meet. Yeah. so I think it's kind of-- these are very Obviously. so on the choice of Bermuda, I mean, you touched on this earlier that, it has certain advantages. How do you, how do you find that? How is the regulator and the government there? Are they permissive? Are they understanding of Bitcoin?" }, { "speaker": "stephan", "time": "37:45", "start": 2265.23, "text": "Yeah, I guess let me take a step back and say Bermuda's really positioned themselves as, you know, the premier offshore place for regulated entities, right? So this is like the insurance capital of the world. Like, you, you walk around Hamilton, Bermuda, and there's like a building with the Chubb and Munich Re and Swiss Re and Aetna and like the, all the huge like insurance companies, are based there or have affiliates there, and the reason that- That is, is that they're just-- they let you do things just a little bit more innovative, but they like don't go too far and they're like really supervise you. So they're really, they're well respected by the Americans, they're well respected and have equivalence to the European framework. And this is sort of in contrast, I think, to like Cayman or BVI or Bahamas, at least on insurance. So like, Bermuda is just a very respectable place to have an insurance company, but it's- It's an, it's a serious place, and they, you know, we have a chief risk officer, a chief compliance officer, and half independent board, like all these corporate policies, like we're running a life insurance company, and they, we meet with them usually like every other month, and, you know, we talk about the business and they're really looking at it. on the other hand, this is also the jurisdiction that Coinbase's offshore operations are in, Bloks' offshore crypto operations are in, Circle's operations are in. so it is a place, with, Premier BERT. Who's like, you know, like the prime minister, that's also tried to be, be forward on, being friendly to crypto and Bitcoin businesses, and yeah, there's a marriage there, and we're, we're the first business to ever get the license we have, which is like the long-term life insurance. License for like innovative businesses, which is basically code for crypto, and it was a slog. I mean, it-- we took about a year to get regulatory permission, another year to stand up the company, in a way that they would approve us to have policy holders, but, you know, now we have something that's not only incredibly valuable to our users, but also, you know, globally unique and back to how we raised forty million dollars, you know It's something valuable." }, { "speaker": "zac_townsend", "time": "40:13", "start": 2412.72, "text": "Yeah, excellent. one other topic that's super hot right now is AI. So I'm curious, are you, how are you using it? Are you using AI to try to outmaneuver like the tradfi legacy insurance world?" }, { "speaker": "stephan", "time": "40:26", "start": 2426.34, "text": "Yeah. I mean, fundamentally, we, we did start the business in January '22, so ChatGPT hasn't, hadn't come out yet, but I think we have definitely seen an evolution in our business from just automation and software into AI, and actually my co-founder and I We literally have been building, wrappers around different agents to create, like personas. So we have a persona that is, like, starting to write our website copy, and you just, like, really have to train that, like, single agent to be really good at that one thing. but our ultimate vision is to be the world's largest life insurance company. and that's, life insurance in Bitcoin, that's annuities in Bitcoin, that's term life. If that's company owned life insurance, like everything, we believe that this is going to be the dominant store of value, and we say that to achieve that, scale, we also, you know, want to have- A thousand people where incumbents have a hundred thousand people. and to do that, we are using AI. We actually, we didn't end up making space for this, but we had one of the like traditional insurance asset managers offer to participate in our A. And these people don't care about Bitcoin, they don't care about crypto, they don't care about this space at all. And we're like, \"Why do you wanna invest? \" And they're like, \"You run a life insurance company? \" With ten people, it's like unprecedented." }, { "speaker": "zac_townsend", "time": "42:03", "start": 2523.29, "text": "Right. Yeah, I, I think it's, it's really fascinating to see this whole new world now of people are just using AI to really amplify their impact and be able to have- Yeah. We're starting to see the," }, { "speaker": "stephan", "time": "42:14", "start": 2533.95, "text": "it's not 10x yet, but we're starting to see the like 3x, 4x, 5x, impact. And our aspiration is, you know, instead of having a, a finance department, we have a CFO, and instead of having a compliance department, we have a chief compliance Has, expertise and leverage through, AI tooling." }, { "speaker": "zac_townsend", "time": "42:39", "start": 2558.69, "text": "Yeah, it's fascinating to see what happens there and, exactly how much, you know, gain can be squeezed out of this stuff. I mean, it's still early days, so we'll sort of see what happens there. and you were touching on this, so might be good to talk a little bit about where Meanwhile is going. So as you said, we, we've been talking mostly about the whole life insurance policy, but you mentioned the- The aim is to also have other forms of products, you mentioned like term life or annuities. Can you elaborate a little bit on that? Yeah, so" }, { "speaker": "stephan", "time": "43:07", "start": 2587.31, "text": "we are definitely gonna do an annuity, and You know, I think when people hear annuity, they think about like literally getting a payment every month, but really what an annuity is, in most places, is it's deferred. So it's basically like a 401k or a, a retirement savings account between now and when you retire, and then you have the option to annuitize it. So we're gonna bring that to market, Maybe this quarter, hopefully next, and that's gonna be a product available like all over the world. So we call an annuity actually in most of Europe, they call an insurance fund. there's different names for this idea, but the fundamental idea is like you would give us-- give us the wrong word, you would, pay, premiums. Let's say you put in ten Bitcoin, we would give a crediting rate. so let's say that's two percent. And then every year, like on the one year anniversary, you would decide whether to like roll it or withdraw it. And then there's different tax implications of that, like depending on your jurisdiction, right? But in, in like much of Europe, for example, if you hold value inside one of these insurance bonds for ten years, it becomes tax-free, including capital gains tax-free. I don't know the rules, in Canada, in the US, there's, there's, so this is gonna be an amazing product, like, again, it's a, you have to trust us as a counterparty, right? So there's, there's still that hump to get over, and, you know, we do everything we can to, to, to work on that, and, you know, have the audit and the people and, and the oversight. but this product, I think, is going to- To just be amazing for a lot of people, both in that just getting any yield on Bitcoin is tough, so doing it in this institutional regulated wrapper is, I think, gonna be really attractive. And then as I said, different, different countries have amazing tax benefits for, for these annuities. I think after that, we're probably gonna go through a series of thing, of products that we have inbound demand for, but you just aren't gonna get a lot of like interest. Like, there's company owned life insurance, which is when, is when a like company owns life insurance or puts it inside the deferred compensation plan. There's this stuff called bank owned life insurance, where banks can, can have tier one capital, wrapped in an insurance policy, which would be amazing to put Bitcoin in. there are other versions of permanent whole life products that I think will do. I think it'll be a while before we do term life or accidental death And that's primarily because, although I think term life, there's a real benefit, right? So term life is basically it lasts a term, so it lasts like ten years, twenty years, thirty years, and you're very unlikely to die in the next ten years, so there's a really high payout relative to your pay-in. But If a ten years passes, you don't get paid. So you put value in and you've really gotten something, you've paid for something, which is that protection, but in the end, you didn't like get any payout. And we think that like we-- there's just so many Ponzi schemes and You know, rug pulls in, in this world that even though that is such a legitimate product, it like just doesn't feel right to say almost all of our policyholders in term life will pay us and never receive a payout. so I think we will only do that in five years or, or whatever where everyone knows that we're legit and trusts us and we've really gained that- Credibility. whereas now I think we, I think we are trustworthy and have credibility, but also like one of the credibility is like we had a, we had a user recently who, who surrendered, which meant that they, they wanted their money back, and we sent them their money back. And I think those little, you know, eventually someone will die, and we'll, we will pay the claim. And it's those little things of, of every day we, we make sure to meet our commitments commitment to keep our promises, and the more you do that, particularly cycle over cycle, I think the more right you have to bring different products to market." }, { "speaker": "zac_townsend", "time": "47:53", "start": 2873.13, "text": "And as you were saying, there is an element of building trust over time, and people respect longevity. And so I guess that's why sometimes people look at these super old, hundred-year-old or multi-- you know, really long-lived companies, for products or insurance. So I guess, you started in twenty twenty-two, correct? So January twenty-two." }, { "speaker": "stephan", "time": "48:14", "start": 2893.91, "text": "Well, can I tell you something funny, which is there's, there, I forget its name, but there's an amazing book on nineteenth-century life insurance, and it was like crypto. It was the Wild West. There were, there were like companies popping up, there, there were scams, there were schemes, but, you know, like fundamentally it's like a good product, and then like a few companies, survive and persist. Like people would go door to door, you know, it, it, it felt like airdrops. I mean, it was, it, it really-- I, I joke that there, there, there really is just this, this parallelism between, the creation of new financial products over time, and we're not Trying to bring the scammy part of crypto to the respectability of life insurance. We're trying to bring the respectability of life insurance to, Bitcoinland." }, { "speaker": "zac_townsend", "time": "49:06", "start": 2945.91, "text": "Yeah. and yeah, I guess, I'm curious how you've found that process. So, you know, it's May 2025 now, so you've been-- As a company, you've been around for, let's say, three and a half years roughly. What has it been like building trust, over that time period? Especially 'cause 2022 was a pretty brutal bear cycle for Bitcoin." }, { "speaker": "stephan", "time": "49:26", "start": 2965.95, "text": "Yeah, yeah. one thing that I think has worked well for us, is, as I said, we just have done what" }, { "speaker": "stephan", "time": "49:36", "start": 2975.55, "text": "For our seed investors in January '22, like we then would go out for the Series A, and everyone who read that memo was like, \"Oh, you did exactly what you said you were gonna do." }, { "speaker": "stephan", "time": "49:48", "start": 2988.03, "text": "and actually this, this podcast is an example. If you go back and listen to our first podcast, when we were like first on the scene, which is maybe about eighteen months ago, you know, I think you were friendly, but you were hard. You, you were, you were, you were direct, and you, you had some feedback that, you know, like, \"Oh, like, we're sending you our Bitcoin, and then you like put it in a big pile of Bitcoin, and then you lend it to people? Like, I don't know, Zach.\" Like And then now I think you and so many other people get to see like, well, we said we're gonna do that, we've had no credit losses, like here are audited financials by a like respectable third party auditor, like here's our forty million dollars Series A, and every single one of these things, like, adds up and is a like brick in the wall of respectability and And it's, it's been working. I mean, like literally every week now, we have some user who signed up on our website a year ago. Like come out of the woodwork and say, \"Oh, you know what? I, I'm, I'm, I think I'm ready. You know, I'm, I, I've like heard, heard about you guys in ten different places. so yeah, that, maybe that's a long way of saying, you know, thank you for, having me on again and, letting me tell the story. I just think it's, that's part of, part of getting out there, telling people what we're doing, and then actually just doing it," }, { "speaker": "zac_townsend", "time": "51:22", "start": 3082.32, "text": "Well, yeah, thank you. And I think, the-- obviously, you know, our first interview, I think it was, you know, the, the FTXs and the Celsiuses and the Terra Lunas were a lot closer in everybody's mind. So it was just sort of-- There's a certain level of, paranoia that everyone just sort of has, but I think the longevity really proves out and also- People who've been around in the space for a while, at companies who've been around in the space for a while and survived, you know, through the bull and the bear cycles, I think that they are the ones who have really built up a reputation and, and then you, you know, obviously you need to- Yeah, to your point, I think we" }, { "speaker": "stephan", "time": "52:02", "start": 3122.32, "text": "get a lot of credit for, in twenty twenty-two, FTX happens. Celsius, Blockfi, and we just kept doing our thing. And in fact, I mean, much to our investors' happiness, we bought a ton of Bitcoin between like seventeen thousand and twenty thousand, 'cause I'm like, you know, if we're- We, we believe in this thing and like we're going, either we're going down or, or, you know, we're gonna, it's gonna be real and that's, that's obviously been great for our balance sheet, but also it's just a testament to, like, we believe in Bitcoin and actually unlike some of the treasury companies, like, we can't sell the Bitcoin we have. I mean, like, like we don't even have a bank account. Like, it is a Bitcoin company." }, { "speaker": "zac_townsend", "time": "52:55", "start": 3175.07, "text": "Oh, I didn't know that. You didn't even have a bank account?" }, { "speaker": "stephan", "time": "52:58", "start": 3177.97, "text": "Yeah." }, { "speaker": "stephan", "time": "53:01", "start": 3180.64, "text": "I mean, we, we have to like pay our vendors, but, but the insurance company, yeah, like doesn't have a, a fiat bank account, and that's on purpose, and that- Maybe we're stubborn, but I think that that, like year over year, story will turn into a decade over decade story, and we'll have built, I think, one of the most important companies, not just in the Bitcoin economy, but in the world." }, { "speaker": "zac_townsend", "time": "53:31", "start": 3210.67, "text": "One other question, around the bank accounts. What, what you're, what are you thinking around stablecoins? Are you gonna offer that kind of thing in terms of payouts or is it gonna be like a separate thing?" }, { "speaker": "stephan", "time": "53:44", "start": 3224.0, "text": "Yeah, we're, we're thinking about it like, you know, we, if I go back to my original example of your middle-class person in Argentina. I think where stablecoins have seen a lot of success is in cross-border payments, and then also it turns out there are just a lot of people in the world who wanna save in dollars. Now, I would prefer they wanna save in Bitcoin, but they wanna save in dollars, may-- and hopefully they wanna save in dollars and Bitcoin. so we've been thinking about setting up a completely separate company. A parallel company, so the Bitcoin company has no currency risk, it lives on its own, it's all matched in Bitcoin, and then we set up a separate company that does like stablecoin life insurance. Now, from the user's perspective, they come to our website, they make a decision between these two stores of value. so we've been thinking about that, again, primarily driven by so many users asking us for that. but again, I think in time- I would urge people to put more of their long-term savings in Bitcoin, but I don't think everyone's there. And also, I think that, you know, as we talked about in the middle of the conversation, That hyper Bitcoinization might not happen for twenty years, as you said. so there's, you know, there's a lot of intermediate time where you might wanna, a dollar savings account or a, a dollar annuity or a dollar whole life policy to borrow against." }, { "speaker": "zac_townsend", "time": "55:10", "start": 3310.35, "text": "Gotcha. So, yeah, I mean, for me, obviously, I think the Bitcoin denomination aspect is, much more appealing, but certainly there are people out there, different desires and, you know, different phases of life and so on. So, yeah, it can make sense in certain contexts, but of course, I would always, I would always say, you know, Bitcoin, focus, don't lose, don't lose focus on the Bitcoin part of it. But, yeah, it's interesting to chat and, probably a good spot to Zach, where can people find you online?" }, { "speaker": "stephan", "time": "55:43", "start": 3343.09, "text": "Well, yeah, the company's at, meanwhile dot bm, if you can't remember that, meanwhile dot com does redirect. and I'm ztownsend on Twitter, my, my DMs are open. and if you sign up on the website, even if you don't get all the way through the flow, we reach out to every single person who signs up on the website, whether it's me or a few of my colleagues, you know, buying life insurance is a big decision. Part of- With your Bitcoin might be an even bigger decision, so we have a human, conversation with every single one of our potential policyholders, so that is how you can definitely talk to me or someone at the company, even if you just Start the user flow, you'll eventually get an email from somebody whether you want it or not." }, { "speaker": "zac_townsend", "time": "56:34", "start": 3393.64, "text": "No AI deepfakes there. Yeah, yeah." }, { "speaker": "stephan", "time": "56:36", "start": 3396.12, "text": "No, no, no, it's human beings." }, { "speaker": "zac_townsend", "time": "56:39", "start": 3398.73, "text": "Of course. Yeah. All right, well, thank you, Zach, and, yeah, I'll see you around. Thank you." }, { "speaker": "stephan", "time": "56:43", "start": 3402.97, "text": "All right, cheers." } ] }