Abra to Launch US Chartered Bank, Crypto Yield Accounts

Abra, a financial services company and crypto trading firm, announced the launch of three new products: Abra Bank, Abra International, and Abra Boost. 

Abra Bank will be a U.S. charted bank that’s expected to offer crypto on- and off-ramps to fiat, with Abra International offering the same for clients living outside the U.S.

The third product, Abra Boost, will offer interest-bearing deposits for cryptocurrencies. International customers can begin earning interest on their holdings from October 3. U.S. accredited investors and institutions in the U.S. will have to wait until the launch of Abra Bank in 2023.

It’s unclear how much these deposits will yield, nor which cryptocurrencies will be available. Abra has not yet responded to Decrypt’s request for comment.

The bank’s CEO Bill Barhydt took to Twitter, claiming that Abra will be the “first operational U.S. state chartered bank—a full bank not a trust.” He said the firm will offer trading, asset management, non-fungible tokens (NFTs), and credit cards, among other services and products. 

This launch is only the next step in Abra’s long history with crypto.

In December 2020, Abra released its Abra Crypto Marketplace, with access to Bitcoin, Ethereum, and more than 650 different cryptocurrencies with onboarding via credit cards, ApplePay, and Samsung Pay.

With the launch of Abra Borrow in 2021, the firm continued down “the road to becoming a complete crypto bank.” The service is available in 35 US states and over 50 countries, offering clietns short-term USD stablecoin loans based on the amount of Bitcoin or Ethereum they hold.

Abra customers can take out BTC and ETH loans with 0% interest rates, too, according to a June 2021 announcement. 

Clients can also “access 10% of their holdings for free while still gaining the benefit of any upside price movement of those holdings.”

Abra joins list of crypto banks

Crypto regulation and banking is becoming a hot topic, with Switzerland leading the way and the United States still torn on the issue. 

In August 2019, SEBA Bank, a Swiss bank, received regulatory approval to integrate crypto into its traditional banking sector. Over two years later, Ethereum staking was added to the list of crypto services, providing ETH staking services to customers ahead of the Ethereum merge into proof-of-stake (PoS). 

In 2020, Switzerland signed the Blockchain Act into law, enabling the simple use of crypto, decentralized finance and blockchain technology, as well as facilitating the creation of digital shares. 

In the United States, the emergence of crypto banks has ushered in fresh debate.

In August, the Federal Reserve introduced a new way of granting institutions approval “​​based on their apparent risk level.” Tier 1 is for federally-insured institutions, 2 is firms “subject to federal prudential supervision,” and 3 is for those that are considered weaker than the two tiers.

Crypto banks from Kraken and Custodia would likely fall into Tier 3.