Abra has decided to add access to collateralized equities investing. This means that users of the exchange and wallet app in 155 countries will be able to trade on popular U.S. stocks and commodities like gold and even use cryptocurrency to do so.
Abra, a cryptocurrency wallet app and exchange with native support for bitcoin cash, has announced that is set to offer its global users the opportunity to invest in stocks, commodities and ETFs, all within the app. The service is going to start with popular U.S. stocks and ETFs and the company also promises to add more global assets in the coming months.
“Many consumers in the US and other countries already have access to stocks and mutual funds via online brokerages. However, many people (billions actually) are shut out of these investment opportunities due to their geography, financial status or lack of accredited investor status, income level, or lack of trust for their local financial institutions. That’s why Abra is leveling the playing field for everyone,” stated CEO Bill Barhydt. “At Abra, we already have low-income families in the Philippines and rich venture capitalists in the US using our app to invest in cryptocurrencies. Now we’re giving our customers access to the same investment products that everyone in the US has enjoyed for decades.”
Powered by Crypto-Collateralized Contracts
Abra explains that it is able to offer this by using the same “crypto collateralized contract model” that the company deploys for digital assets. Crypto-collateralized contracts allow an investor to gain exposure to any asset by using cryptocurrency as the underlying technology for the investment. When a trader buys such an instrument, they are effectively creating a smart contract which automatically determines whether they have made or lost money based on the price of the underlying asset.
This model also means that the company needs to take the chance that the trade goes against it. “Simply put, Abra is taking that risk,” said Barhydt. “However, Abra hedges away our risk on these contracts in the open market at the moment the consumer creates the investment. Abra has already successfully processed hundreds of millions of dollars worth of these investment contracts and has never lost money on them.”
What do you thunk about the Abra app adding stocks and ETF investing? Share your thoughts in the comments section below.
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