Momentum builds for mobile investment app Abra after a recent announcement to roll out worldwide investment access. People in 155 countries around the world will be able to invest in stocks, ETFs, commodities, cryptocurrencies, and fiat currencies from a single application on their smartphone.
The effort seeks to bring easy access to financial markets to all citizens of the world by democratizing access to investments and construct equal access to growing wealth.
Abra’s website claims their “vision is to open access to the global financial system and drive greater financial inclusion.” Through the decentralization of finance and financial products, Abra users can buy and invest in hundreds of assets they may not have had access to previously. How can this be though? How can a single platform navigate the legal regulation of 155 countries and offer its product worldwide?
Abra has invented its own form of synthetic asset to avoid the scrutiny of regulatory agencies. When a user deposits funds, those funds are automatically converted to Bitcoin or Litecoin and protected and enabled by the blockchain.
From there, the assets are stored in a multi-signature contract with Abra that effectively creates a stablecoin to ensure user funds are safe from price volatility in the crypto space.
When the user is ready to start investing in stocks, ETFs, or any of the other assets, Abra similarly utilizes smart contracts to carry out these trades.
Abra allows you to own a contract that is a bet on an underlying asset instead of owning the asset itself. Rather than acting as a normal broker or exchange — and subjecting itself to harsher regulation, Abra uses smart contracts to produce the same effect as owning the underlying asset.
So why is this method of investing such a big deal? Abra Founder, Bill Barhydt comments on how “it’s legally impossible for one company to make it easy for people 150 countries to buy stocks where you physically hold the stuff.”
Given the impossibility of navigating countless jurisdictions, it’s simply easier to use Bitcoin as a reserve currency to bet on assets because it produces the same net effect for investors. Even those who are not interested in cryptocurrency or are too scared to own it themselves are able to use the platform without worry.
When a contract is sold, funds are converted back to a fiat currency of choice, and if a user “owns” a stock that pays dividends, they are still entitled to receive them. All of this occurs without the user ever truly owning the shares.
To maintain concurrency with markets, Abra partners with CBOE and Xignite to procure real-time data that is used to determine accurate prices for contracts.
In using bitcoin as a reserve currency for their platform, Abra is enabling a window for Bitcoin to perform an important function that defines something as money. Bitcoin is now a unit of account, a specific currency used to measures the value of things.
This function, along with user exposure to crypto assets through traditional investment products will create what Barhydt called a “halo effect.”
Hopefully, people will realize the functionality in Bitcoin — if nothing else — through their use of the platform.
An important feature of the Abra wallet is allowing user ownership of private keys. This non-custodial wallet architecture frees users from third-party security risks and vulnerabilities. Abra does this by utilizing the Bitcoin blockchain and providing unique recovery phrases for each wallet.
The individual is in control of their own phrase and allowed transparency, liquidity, and security of their funds. Rather than follow the model of other exchanges, Abra has embraced the individual financial sovereignty that defines the Bitcoin vision. Rather than mimicking a bank account, Abra seeks to replace the need for institutions to hold and manage one’s money.
Abra plans to roll out the additions to the platform in the next few weeks. For now, users can sign up for commission free trading as they wait for this potentially groundbreaking product.