Abra wants to be a digital currency bank

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Digital currency investing platform Abra has announced that it would start offering interest-bearing accounts for six digital currencies: BTC, ETH, USDT, USDC, PAX, and TUSD. 

“We chose the initial currencies supported by Abra Interest Accounts based on investment market demand and Abra user interest,” Abra CEO and Founder Bill Barhydt told CoinGeek.  “We will be adding more currencies in the near future based on both criteria.”

Although Abra is not offering interest on Bitcoin SV (BSV) deposits yet, Abra does allow its users to buy, sell, and hold BSV on their platform.

Why offer interest?

“Abra Interest Account was one of the most requested features that our users have ever asked for,” said Bahrhydt.” We’re excited we could finally bring it to them.”

Abra’s move to offer interest to their customers resembles what traditional banks do for their customer’s fiat currency deposits. Most banks offer their customers interest because they use the deposits to make loans, and, in the process, help the banks make money.

“Traditional financial services companies have not yet embraced cryptocurrencies as yield generating instruments,” said Abra in their blog post announcing the Abra Interest Account. “Abra has decided to do the work for them and build the ultimate crypto bank.”

More and more digital currency platforms are offering their users interest on digital currency deposits. In addition, the lending and borrowing features on DeFi platform are becoming increasingly popular as consumers have learned that they can make a quick buck via lending.

Given Abra’s interest account offering, customers can expect more digital currency service providers to offer interest-bearing accounts in the future if they want to stay competitive. Customers can also expect the platforms that already offer interest on digital currency deposits to expand their interest product to include more digital currencies, or even increase their interest rates if they want to compete with Abra.

Abra settles with SEC and CFTC

Abra’s new product launch comes on the heels of its settlement with the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) over charges of violating securities and commodities laws.

The SEC pressed charges against Abra in connection with “offering and selling security-based swaps to retail investors without registration and for failing to transact those swaps on a registered national exchange,” while the CFTC pressed charges against Abra over “entering into illegal off-exchange swaps in digital assets and foreign currency with U.S. and overseas customers and registration violations.” Abra paid each government agency $150,000 as part of their settlement agreement.