BTC Now
01Partnership Overview
Bitcoin is the fastest-growing asset class in history — yet no bank has built a consumer credit product for acquiring it. Every other major asset class (real estate, automobiles, equities) has mature institutional financing. Bitcoin has none.
BTC Now is building the Affirm/Klarna model for Bitcoin — installment purchase plans that let consumers acquire Bitcoin through fixed monthly payments, originated through a licensed bank partner using the proven Lender of Record structure.
Value Proposition for Bank Partner
The bank earns fee income on every origination. BTC Now provides the complete technology stack, customer acquisition, underwriting capital, servicing, and compliance infrastructure. The bank provides only the lending license.
Key insight: The same Lender of Record model that powers $140B+ in annual Affirm, Klarna, and BNPL originations — applied to a $2.2T asset class with zero competition.
02Lender of Record Model
The program follows the proven Lender of Record structure used by Affirm, Klarna, and other fintech lending platforms.
Capital Flow Mechanics
- Capital Posting: BTC Now Warehouse Fund posts underwriting capital with the bank before any loans are originated.
- Origination: Bank originates loans using the posted capital — never its own balance sheet.
- Seasoning: Loans remain on bank balance sheet for 3-7 business days (subject to bank approval).
- Purchase: BTC Now purchases every loan note, transferring 100% of credit risk.
- Servicing: BTC Now Inc. services all loans, manages payments, custody, and collections.
03Credit Box & Underwriting
BTC Now uses a 5-tier credit structure with conservative underwriting. All borrowers must pass 11 non-negotiable eligibility requirements.
5-Tier Credit Structure
| Tier | FICO Range | APR | Max DTI | Terminal Value ($100K/120mo) |
|---|---|---|---|---|
| Tier 1 | 750+ | 10% | 65% | $158,581 |
| Tier 2 | 700–749 | 12% | 60% | $172,165 |
| Tier 3 | 670–699 | 14% | 60% | $186,319 |
| Tier 4 | 640–669 | 16% | 55% | $201,016 |
| Tier 5 | 620–639 | 18% | 55% | $216,222 |
11 Hard Requirements (Non-Negotiable)
- Natural persons ONLY — no businesses, trusts, LLCs
- Must be a U.S. resident
- 18 years or older at application
- Minimum FICO score of 620
- DTI ratio 55–65% (FICO-tiered, including proposed payment)
- Must link bank account via Plaid
- Must pass Plaid income verification
- Must pass identity verification and OFAC screening
- No bankruptcies within 24 months
- Minimum 6 months verifiable income history
- No outstanding deficiency balance from previous BTC Now loan
Note: Multiple concurrent performing loans ARE permitted. The $10,000/month aggregate payment cap applies across all active plans for a single borrower.
All tiers comply with the Military Lending Act (MLA) 36% MAPR cap. DMDC database check is mandatory for all applicants.
04Product Structure & Terms
The Bitcoin Installment Purchase Plan offers fixed monthly payments that never change regardless of Bitcoin price movements. Each plan is fully collateralized with Bitcoin held in a dedicated, segregated wallet.
Standard Loan Example
Payment Examples (BTC at $100,000 / 15% APR)
| Amount | 12 Month | 60 Month | 120 Month |
|---|---|---|---|
| 0.25 BTC | $2,256 | $595 | $403 |
| 0.5 BTC | $4,513 | $1,190 | $807 |
| 0.75 BTC | $6,769 | $1,784 | $1,210 |
| 1 BTC | $9,026 | $2,379 | $1,613 |
Key Product Distinctions
Important: This is an installment plan, not a traditional loan. Financing costs are fixed at origination. Early payoff requires payment of the full terminal value — there is no discount for early payment. This is a fundamental structural difference from traditional consumer lending.
- Non-recourse structure — In default, the lender seizes Bitcoin collateral but will never pursue deficiency judgments or legal proceedings against the borrower.
- Segregated custody — Each loan has a dedicated Bitcoin wallet via Fireblocks Trust. Never pooled or commingled.
- No margin calls — Bitcoin price declines never trigger forced liquidation or additional payment requirements.
- Credit bureau reported — Monthly reporting to all 3 bureaus via Metro 2 format through Bloom Credit.
05Yield Maintenance
When borrowers exit early (typically because Bitcoin has appreciated), a yield maintenance fee compensates the lender for lost future interest. This accelerates annualized returns dramatically.
Formula
When Yield Maintenance Applies
| Scenario | YM Applied? | Rationale |
|---|---|---|
| Customer exits early, BTC UP | Yes | Customer is profitable — fee is the price of the prepayment option |
| Customer exits early, BTC FLAT | Yes, if proceeds cover | Applied only to extent covered by collateral |
| Customer exits early, BTC DOWN | No — Waived | Taking collateral loss is sufficient |
| Customer defaults | No | Lender retakes Bitcoin, reports shortfall |
Scenario A — Bitcoin Moons (Exit Month 24, BTC = $200K)
Lender collects $39,800 YM + $63,100 remaining principal = $102,900 total settlement. Capital redeploys immediately.
Scenario C — Bitcoin Crashes (Exit Month 24, BTC = $20K)
Non-recourse: no legal action. $43,100 shortfall reported to credit bureaus. Prior payments ($26,881) + collateral ($20,000) = $46,881 total recovery on $70,000 deployed.
Capital Velocity Table
| Exit Month | Remaining Balance | YM Fee | Total Collected | Ann. Return |
|---|---|---|---|---|
| Month 6 | $68,450 | $47,800 | $116,250 | ~95% |
| Month 12 | $66,800 | $45,200 | $112,000 | ~60% |
| Month 24 | $63,100 | $39,800 | $102,900 | ~32% |
| Month 36 | $58,900 | $33,900 | $92,800 | ~24% |
| Month 60 | $48,600 | $21,000 | $69,600 | ~15% |
| Month 120 | $0 | $0 | $134,477 | ~15% |
Based on $70,000 at 15% APR. Treasury discount rate assumed at 4.5%.
Legal Defensibility
- Not a penalty: 7th Circuit precedent. Borrower exercises a contractual right, not a breach.
- Asymmetric optionality: Borrower has a put option (walk away, no personal liability). YM compensates for granting that right.
- Waived on underwater exits: Fee only applies when borrower profits. Cannot be characterized as predatory.
- Full disclosure: Plain-language explanation, separate acknowledgment, pre-calculated schedule at origination.
- Commercial precedent: Standard in CMBS, Fannie Mae, Freddie Mac. Novel for Bitcoin but established framework.
06Flow of Funds
The program involves 6 entities with clearly defined roles. Capital flows are structured so the bank never bears credit risk beyond the seasoning period.
| Entity | Role |
|---|---|
| Bank (LOR) | Originates loans using charter; holds 3-7 days; sells to Warehouse Fund |
| Warehouse Fund LLP | Posts capital; purchases loans; receives payments; holds on balance sheet |
| BTC Now Inc. | Servicer — collects payments; manages custody; earns 1.5% servicing fee |
| Repay.com | Payment processor — ACH, debit, eCash collection |
| Kraken | Exchange — converts USD to BTC; locked price quotes |
| Fireblocks Trust | Custody — segregated wallets, MPC 2-of-3 multi-sig, $750M+ insurance |
Origination Cycle
- Warehouse Fund posts underwriting capital with Bank
- Borrower signs & makes first payment via Repay.com
- Bank originates loan using posted capital
- USD released to borrower's FBO account within 1 business day
- Bank sells loan to Warehouse Fund after 3-7 business days
- Borrower converts USD to BTC via Kraken → Fireblocks custody
Servicing Fee Example
Based on $100,000 loan balance. Monthly fee: $100K × 1.5% ÷ 12 = $125.
For the complete Flow of Funds documentation including all 6 entity flows, BTC conversion mechanics, default & liquidation, and loan completion — see the Flow of Funds resource document →
07Technology Platform
BTC Now provides the complete technology stack. The platform is built on a 4-layer architecture with institutional-grade infrastructure at every level.
4-Layer Architecture
| Layer | Components |
|---|---|
| Customer | BTC Now Consumer Portal, Web + Mobile, 10-Step Digital Onboarding, 5-Min KYC |
| BTC Now Integration | Fireblocks API (Custody), Exchange API (BTC), USDC Payments, Webhook Engine |
| LoanPro Backend | Loan Servicing, Payment Processing, Workflow Engine, Reporting & Analytics |
| Third-Party | Repay (ACH/Card), Bloom Credit (Bureau Reporting), Plaid (KYC/Banking) |
16-State Installment Plan Lifecycle
Each plan follows a defined state machine from application through completion or charge-off:
For the full 33 requirements specification, lifecycle state definitions, and webhook API details — see the LoanPro Specification →
08Default & Collections
The default process follows a 35-day delinquency timeline with mandatory human review before any collateral seizure.
35-Day Delinquency Timeline
| Day | Status | Action |
|---|---|---|
| 1 | Payment Missed | Automated reminder (email/SMS) |
| 7 | 7 Days Past Due | Second reminder |
| 10 | 10 Days Past Due | Warning notice; account flagged |
| 15 | Grace Period Expires | $15 late fee; Right to Cure Notice sent |
| 16–34 | Cure Period (20 days) | Weekly contact attempts |
| 35 | Cure Expires | Human review triggered |
| 35+ | Default Review | If confirmed: formal default notice |
Chronic Delinquency Escalation
| Occurrence | Action |
|---|---|
| 1st Cure | Standard process |
| 2nd Cure | Standard + written warning |
| 3rd Cure | Standard + FINAL WARNING |
| 4th Cure | ACCELERATION: Full terminal value due OR mandatory auto-pay |
No reset — cure occurrences are tracked for the lifetime of the loan.
ACH Failure Policy
Critical: The 35-day grace/cure period does NOT apply to ACH failures. 1st NSF: $25 NSF fee + $15 late fee. 2nd consecutive NSF: IMMEDIATE ACCELERATION — full terminal value due within 15 days or BTC collateral seizure.
Default Liquidation Process
- BTC Now Inc. confirms default after human review
- Initiates BTC collateral seizure from Fireblocks
- BTC transferred to exchange for market liquidation
- USD proceeds sent to Warehouse Fund (loan owner)
- Deficiency calculated; surplus (if any) belongs to borrower
09Payment Infrastructure
Payment Methods & Hierarchy
| Method | Availability | Fee |
|---|---|---|
| FBO Account Balance | Always (charged FIRST) | None |
| ACH Transfer | All payments | None |
| ACH Auto-Pay | All payments (borrower-configured) | None |
| FedNow | All payments | None |
| Debit Card | All payments | $5.00 |
| Credit Card | FIRST PAYMENT ONLY | $5.00 |
| Repay.com eCash | In-store at retail locations | Service provider fee |
3-Stage Loan Funding Process
Payment Frequency Options
| Frequency | Payment | Periods | Terminal Value |
|---|---|---|---|
| Weekly | $221.15 | 520 | $115,000 |
| Bi-weekly | $442.31 | 260 | $115,000 |
| Monthly | $958.33 | 120 | $115,000 |
Terminal value is identical regardless of payment frequency. Based on 1 BTC at $100K with 15% tier.
Pre-conversion cancellation: If a borrower cancels before BTC conversion, the USD loan amount is returned. However, all installment payments made to date are retained (non-refundable). No credit bureau impact from cancellation.
10Compliance & Regulatory
The program is designed for full regulatory compliance across all 50 states with code-level enforcement of all policies.
Regulatory Framework
| Regulation | Compliance |
|---|---|
| TILA | All required disclosures integrated into digital application flow |
| MLA | All tiers comply (10–18% APR vs 36% MAPR cap). DMDC database check mandatory for all applicants |
| ECOA | No discrimination, consistent criteria across all applications. Adverse action notices within 30 days |
| FCRA | Two-stage credit pull. Monthly Metro 2 reporting to all 3 bureaus |
Credit Pull Strategy
Soft pull at application for pre-qualification (no FICO impact). Hard pull only after borrower accepts the offer for final verification. Post-acceptance decline rate expected <1%.
Code-Level Enforcement
- AML/KYC/OFAC: Automated screening via Plaid — no human discretion in compliance checks
- State compliance: State-based workflow assignment in LoanPro (REQ-009) — each state's specific rules enforced automatically
- Late fees: State-dependent calculation (REQ-029) — automatically applies the correct fee structure per borrower's state
- Audit trail: Complete transaction-level logging for regulatory examination
11Risk Mitigations
The program is designed to eliminate virtually all risk for the bank partner.
Risk-by-Risk Analysis
| Risk | Mitigation |
|---|---|
| Credit Risk | Zero — BTC Now underwrites all loans with posted capital. All risk transfers within 3-7 days. |
| Bitcoin Price Risk | Zero — Bank holds loans only during seasoning. BTC collateral is held by Fireblocks, not the bank. |
| Regulatory Risk | Baker Donelson designs credit policy. All disclosures TILA-compliant. MLA-compliant APRs (10-18%). |
| Operational Risk | BTC Now handles all servicing, collections, custody. Zero operational burden on bank. |
| Custody Risk | Fireblocks Trust — MPC 2-of-3 multi-sig, segregated wallets, $750M+ Lloyd's insurance. |
| Reputational Risk | Conservative credit box (FICO 620+). Non-predatory terms. Program designed for mainstream adoption. |
Non-recourse structure protects all parties — Loans are purchased from the bank within days. The bank retains no exposure to credit defaults, Bitcoin volatility, or borrower delinquency.
12Product Roadmap
| Product | Timeline | Description |
|---|---|---|
| Bitcoin Installment Purchase Plan | Launching Q2 2026 | Fixed monthly payments to acquire Bitcoin. Core product. Non-recourse, fully collateralized, 12-120 month terms. |
| Bitcoin-Backed Line of Credit | Coming Soon | Revolving credit facility secured by existing BTC holdings. Borrow against Bitcoin without selling. |
| Bitcoin Savings Plans | Coming Soon | Automated accumulation programs with scheduled purchases. DCA into Bitcoin. |
| Wealth & Investment | Future | Wealth management and investment products for high-net-worth Bitcoin holders. |
The installment purchase plan is the beachhead product. The full product suite includes 36+ products across 4 categories — see the Product Suite →
13Partners & Technology Stack
| Partner | Function |
|---|---|
| Plaid | KYC/AML/Sanctions screening + bank data for underwriting |
| LoanPro | Loan origination, compliance, servicing, payment management (33 requirements) |
| Kraken | Bitcoin purchasing & exchange connectivity (locked price quotes) |
| Fireblocks Trust | Bitcoin custody — insured, segregated wallets, MPC multi-sig |
| Repay | ACH, debit, credit card, eCash payment processing |
| Bloom Credit | Credit bureau reporting — Metro 2 format to all 3 bureaus |
| BTC Now Inc. | Platform operator, underwriting liquidity, loan note purchasing |
Legal Counsel
Baker Donelson
Anastasia Stull & R. Colgate Selden — Banking & Regulatory Compliance
Responsible for credit policy design, loan agreement drafting, and regulatory engagement strategy.
14Team & Advisors
Core team has executed together 10–15 years across regulated funds, sovereign debt, and trading infrastructure.
Core Team
Key Hires (Joining at Close)
Legal Counsel
15Origination Projections
BTC Now drives all customer acquisition — zero marketing burden on the bank partner.
Addressable Market
An estimated 50 million Americans already own cryptocurrency and fit the BTC Now credit profile (FICO 580+, DTI ≤50%). These are crypto-native consumers underserved by traditional bank lending products for digital asset acquisition.
Conservative Origination Ramp
These projections are conservative. BTC Now has established a closed-end fund capped at $1B in subscriptions to warehouse originations. Year 1 volume is deliberately constrained — securitization of Bitcoin-collateralized consumer installment plans requires an estimated 6–12 months of loan seasoning before rating agencies and institutional buyers will participate. Volume scales significantly in Year 2 once the securitization framework is proven.
| Period | Monthly Volume | Cumulative |
|---|---|---|
| Months 1–3 | $25M total | $25M |
| Months 3–6 | $25M/month | $100M |
| Months 6–12 | $50M/month | $400M |
| Year 2+ | $100M+/month | $1B+ cumulative |
Year 2 inflection point: Once 6–12 months of loan performance data demonstrates credit quality and the securitization framework is established, capital recycling through ABS issuance unlocks dramatically higher origination capacity beyond the initial $1B fund.
16The Ask & Next Steps
BTC Now is seeking a bank partner with three capabilities:
- 50-State Licensing: A partner bank that can originate consumer installment loans in all 50 U.S. states under existing licenses.
- Regulatory Engagement: Willingness to engage regulators and obtain approval or a letter of no objections for the Bitcoin installment program.
- Dedicated Team: Small dedicated team inside the bank to run the program. Revenue share on origination fees.
Full materials available: This deep dive is part of a comprehensive document suite including Credit Box Parameters, Flow of Funds, LoanPro Specification, Loan Summary & Yield Maintenance, and a 36-product Product Suite. View all materials →
marc@btcnow.com