The Abra Blockchain App – an American Crypto startup – is an investment application that provides a vehicle for users to invest in three different asset classes: fiat, crypto, stocks/ETFs.
The Abra technology utilizes the Bitcoin blockchain and Bitcoin smart contracts to permit fractionalization of stock and ETF investments. That means that if you don’t have enough money to buy a whole Apple share or a whole Amazon share then you can but $5 worth of an Amazon share instead of going all in with >$1500USD for a single Amazon share. And you’d still get the same percent return as a whole share, similar as to how you can buy a fraction of a Bitcoin or Ethereum or XRP.
This is the second business I’ve come across in the same week that is offering the ability to buy fractionalized stocks backed by Bitcoin smart contracts, that can be bought directly with Bitcoin, the first being WorldMarkets.io. As I’ve said on my previous post on the topic (Buy Stocks with Bitcoin), I believe that Bitcoin is the first blockchain that will support the purchase of stocks/ETFs, and I have a strong suspicion that Ethereum and XRP will be a close second.
The Abra App itself serves multiple functions. All of these functions replace a bank, primarily because it is peer-to-peer and a non-custodial service. It puts you in centre stage and in control of your assets. You are your own bank with the Abra App – this is great freedom and great responsibility.
- Investment platform
- Hold 50 fiat currencies, 28 cryptocurrencies, and/or the BIT10 (ETF-like fund of the top 10 cryptocurrencies).
- The ability to purchase fractionalized stocks on the Bitcoin blockchain is coming soon, with early signup now available (on their site here).
- Peer-to-peer payment. Send money for free, in fiat or cryptocurrency, to anyone in the world. One way to be the bank.
- It costs me $1 to email transfer money to my friend down the street. Now I could send money across the Atlantic ocean for free, instantly. Like a text.
- Non-custodial wallet, which means that YOU control your fiat, stocks, and cryptocurrency on your phone, just like a bank.
We have yet to learn how the stocks will be purchased… such as, which exchange is Abra linked to that grants access to the stocks? My guess is the NASDAQ or perhaps… Bakkt, which may launch in tandem with the Abra function to purchase stocks. Will people be able to buy/sell stocks to each other directly via being routed through an exchange? Or will users only have the ability to buy and sell stocks from whichever exchange the Abra App is synced to?
Which brings me to my other question… if you purchase dividend-paying stocks – can you opt to have the dividends paid out in Bitcoin vs. fiat?
I commend the Abra team for developing the non-custodial features – if the stocks are backed by Bitcoin smart contracts then I believe that you certainly will hold custody of the shares. However, it is a US-based startup and when buying/selling stocks you must have AML/KYC and a record to report for tax purposes (dividend income, capital gains and capital losses). There is a difference between being your own bank, but not being anonymous, which, to be honest I am totally okay with.
The Abra App has been around for a little while, initially as an exchange app. They appear to be doing well and trailblazing down territory along with many others.
The non-custodial wallet puts you in charge of your cryptocurrency, your fiat and your stocks. Instead of holding hard physical cash, you can now hold the near-equivalent on a digital wallet, much like cryptocurrency. The world is moving closer and closer to a blockchain world. Great discipline and responsibility will have to be emphasized when you hold your own assets. You must protect your seed word list very well, which I describe nicely in my post on crypto wallet security. The Abra team also emphasize on their website that should you not record your recovery phrase (seed word list) then you are at high risk of losing all of your funds (i.e. your phone breaks, is stolen, lost or you or someone you know accidentally deletes your Abra App).
With Bakkt and Fidelity Digital Assets coming online supposedly by mid-2019 and the deployment of the Abra App and WorldMarket’s ability to purchase stocks with Bitcoin, I can only imagine that the Bitcoin environment is going to have to grow, albeit at a much more steady pace.
Below I have posted the video promo of the Abra App for buying stocks on the app.
I hope you enjoyed this update! Please leave a comment if you want to discuss the Abra App!