A major crypto-investment player is making its first big leap in the world of stock trading.
Abra, the company known for its bitcoin investment platform, will soon offer a service that allows its customers to buy shares in companies using bitcoins. Well, sort of.
"We are allowing something like stock market investing," said Abra President Bill Barhydt in an interview with The Block. For starters, it will offer exposure to 50 assets, including Facebook, Apple, Amazon and Google. Rather than buying real stock in a company, the Abra platform allows users to buy a bitcoin representation of an action.
Here is an example. Suppose that a user wants to buy a share of Apple stock via the Abra platform. This user would feed his account with the money needed to buy Apple at the current price. Immediately, the so-called Abra C3 system converts this money into bitcoins. Then, Abra – using the magic power of smart contracts – maintains the notional value of this bitcoin linked to the price of Apple shares.
In the background of all this, Abra protects himself, bypasses, and Algos is on fire. But the technological magic behind the scenes is not what matters, according to Barhydt. Since Abra does technically does not own any of the shares, nor does its users, it does not have to comply with the same regulatory requirements as Robinhood or TDAmeritrade. This means that its services may be available worldwide in 150 countries.
"Our vision for Abra is to create a single application that is the benchmark application for investment in the world," said Barhydt. "This is just our first announcement and over time you will see other services in the banking field to democratize access to financial services."
Democratize finance. A darling phrase of CEOs of financial technology that appeals to most seasoned financial technology journalists. But Barhydt says that the model of his company, because of Bitcoin, is unique in its kind by the large number of financial companies in the process of democratization (Stash, Acorns, Robinhood, etc.).
First, most of these applications do not allow users in the most remote areas of the world to invest. Moreover, since it is based on bitcoin, it allows users to invest anonymously. "If you drop crypto on Abra to buy SPDR shares, I do not need to know who you are."
For skeptics who may not be convinced that Abra will be able to maintain their bitcoin in their inventory, Barhydt highlights the company's track record. This is not the first C3 rodeo. The company has already provided bitcoin representations of different alternative crypto-currencies. Bardhydt notes that since this service was launched, the bear market and all the rest, the company has been able to maintain the pickets.
"Last year was an excellent case of use," he said. "The bitcoin price has dropped by 80% and our coverage system has worked perfectly."