Abra, the provider of a digital asset investing app, revealed on July 28, 2020, that it has launched new Abra Interest Accounts that offer investors an opportunity to earn as much as 9% interest p.a. on their crypto deposits and certain USD backed stablecoins.
As mentioned in a release shared with CI:
“Available in over 150 countries, the Abra app now enables consumers to earn interest on their crypto holdings, as well as buy, sell, hold or trade 100+ cryptocurrencies, all-in-one simple and trusted experience.”
Consumer willingness to invest a larger portion of their money into high interest-earning accounts is growing steadily, according to a Q4 2019 Crypto Credit Report released by Credmark.
This consistent growth may be attributed to the significant increase in demand for institutional liquidity of digital assets, which has been driving interest rates, and in turn is expected to motivate more consumers to consider using such products.
Bill Barhydt, CEO at Abra, remarked:
“Tens of millions of people hold hundreds of billions of dollars in aggregate of their financial net worth in cryptocurrencies. Yet, no traditional bank views crypto as an asset class leaving the community with no opportunity to participate in markets that traditional fiat money takes for granted.”
Barhydt added that Abra aims to establish a simple-to-use and “honest” cryptocurrency bank which would allow millions of digital asset investors to “maximize the potential” of their crypto holdings.
The Abra Interest account provides daily compound interest on all consumer balances. The digital assets held by customers in their accounts are “matched with the liquidity demand from institutional borrowers to calculate the interest rate offered to users,” the release noted.
The interest rate is regularly adjusted according to the market demand for the assets.
Willie Wang, VP of product at Abra, remarked:
“With the launch of the Abra Interest account we offer an unparalleled opportunity for investors to earn interest alongside the ability to trade all in one simple experience. Consumers can sign up in no time, and start earning interest at a rate several times higher than a typical bank account.”
Abra will be offering interest-generating accounts on deposits made with major cryptocurrencies including Bitcoin (BTC), Ethereum (ETH), Tether (USDT), USD Coin (USDC), Paxos (PAX) and True USD (TUSD). Abra said it will add more assets later on.
In simultaneous announcements, the US Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) have charged Plutus Financial, Inc., doing business as Abra in California, and Plutus Technologies Philippines Corp. dba as Abra International in the Philippines for entering into illegal off-exchange swaps in digital assets and foreign currency with U.S. and overseas customers and registration violations.
According to the SEC’s order, Abra developed and owns an app that allowed users to bet on price movements of U.S.-listed equity securities. Using the app, individuals were able to enter into contracts that provide synthetic exposure to price movements of stocks and exchange-traded fund (ETF) shares trading in the U.S. through blockchain-based financial transactions with Abra or with related company Plutus Technologies Philippines Corp.
