By Tanaya Macheel
Abra's new investment features that allow users to invest their Bitcoin in traditional stocks and ETFs are the latest step forward for the crypto wallet and exchange to become a global crypto bank, CEO Bill Barhydt told Cheddar Thursday.
"Consumers in Mexico, India, China, Southeast Asia [and] parts of Europe are completely shut out of Western investing," Barhydt said. "There’s 100,000 investment accounts in all of Mexico for tens of millions of people. This makes no sense. Our mission is to democratize financial services and we’ve figured out how to do that using this cool crypto blockchain based technology ... it works in 155 countries because we don't have to be some SEC-brokered dealer because of the way this technology works."
Barhydt has been vocal about his vision for Abra to become a kind of crypto bank, where users can act as custodians of their own money, whether it’s Bitcoin or dollars or other crypto and fiat currencies, and whether it’s investing, credit or simply transferring money between two people. Traditional and even upstart digital banks haven’t figured out how to be truly global and borderless, thanks in large part to burdensome regulatory requirements that vary from market to market.
Abra is available in 155 countries and supports the buying, storing, and now investing of 30 cryptocurrencies and 50 fiat currencies. The smart contract platform functioning in the background of Abra’s user interface creates crypto-collateralized contracts that peg Bitcoin to the value of whatever asset the user wants. The concept is a step forward from tokenizing an existing financial asset, which is the extent of innovation for many other crypto companies. This means Abra doesn’t have to be licensed in the markets in which it operates because it doesn’t hold consumer funds — putting users in control of their own funds.
"From the consumer’s perspective they can basically invest in SPDRs, ETFs, Apple, Alphabet, Facebook, without actually having to understand the complexity, without actually having to go through the process of buying the security,” Barhydt said.
The minimum investment is five dollars and Abra will waive fees on traditional stocks and ETF investing for the rest of 2019.
Whether consumers are ready for the responsibility of being their own bank remains to be seen. Last week Canada’s QuadrigaCX exchange lost $190 million of customers’ money after its founder, the company's sole employee, died ー taking with him the password to the cold storage in which it was held. While it’s easy to point to shady or scammy behavior from the company, there have been other cases where crypto investors have lost money that was held on centralized exchanges rather than in their own wallets.
But Barhydt believes users are ready to take that leap.
"We believe consumers are ready to effectively take their smartphone and have a WhatsApp for money,” he said. “That’s really our vision: a single smartphone app globally that allows any consumer to do myriad financial services from investing to credit, getting access to instant loans, global money transfer. Our mission is to make that app available to billions of users.”
This almost sounds like Facebook’s blockchain mission to create a stablecoin for WhatsApp money transfers in less developed markets.
Abra plans to unveil new credit products this year and expand the number of markets where consumers can invest. It’s beginning with the Nasdaq.
"We’re on a mission to keep rolling out financial services unit we really have that Whats App for money,” he said.
For full interview click here