Abra is introducing KYC-less stock investing with cryptocurrencies
Abra, a financial services and technology company that operates a non-custodial cryptocurrency wallet and exchange app, is announcing that everyone, everywhere in the world, now has the opportunity to invest in traditional stocks, commodities and ETFs, all from the Abra app.
Having a single app for stocks, cryptocurrencies, fiat currencies and even ETFs, says Abra founder and CEO Bill Barhydt, “is really compelling and something I know I will be using for the rest of my life.”
“All people need to do to get started with Abra is to download the app, fund the wallet by using a bank account or by using crypto, and soon with a couple of taps, they can start buying and selling exposure to stocks, ETFs, indexes, gold, crypto, fiat currencies — and more investment instruments on the way.”
How it works
Abra is starting with popular US stocks (see image) and Exchange Traded Funds (ETFs), and plans add more global assets in the coming months.
An interesting feature of Abra’s new offering is the possibility to own and trade fractions of shares — say, 1/100th of an Apple share.
According to Abra, this opens up everyone’s investing potential. “Now, even small dollar amounts can quickly and easily be invested in the stock market, or into a gold ETF,” notes the announcement. The minimum investment is $5 (or equivalent in a cryptocurrency). The company is offering zero trading fees on Abra’s new equities offerings through 2019 for everyone that signs up for early access.
The shares, or fractions thereof, purchased by Abra customers through the app, are not really “owned” by the customers. Rather, the customers own special smart contracts dubbed “Crypto-Collateralized Contracts” (C3).
According to the announcement, Abra absorbs the risk and customers are always able to exit a C3 at current market value. I am assuming that Abra’s C3s offer watertight security (if such a thing exists) against theft.
The Abra FAQ explains that, when customers purchase stocks on Abra, they are purchasing exposure to the stocks without owning the stocks directly. “This is similar to a Gold ETF where you gain exposure to the price fluctuations without actually owning the underlying asset — gold.” Abra customers receive dividend payouts, but of course not voting rights.
No KYC
The privacy aspect of Abra’s new offering is especially interesting. “Abra is built from the ground up with privacy in mind,” says Barhydt. “Technically, there are no user accounts at Abra. You are simply holding the keys to your assets in the Abra App on your phone.”
“If you deposit bitcoin into the Abra app to make your investment we don’t even need to collect any personal details.”
What? WHAT?? W-H-A-T??? No KYC????
No KYC indeed, Barhydt confirms in a tweet:
I guess Abra is able to escape KYC regulations because it doesn’t hold customer funds, but I am still surprised. I think this is a very interesting experiment and a first step toward opening investment opportunities to everyone.
Picture from Pixabay.
