Abra launches the first regulated crypto bank in the United States

  • Abra Bank will launch in the United States in the first quarter of 2023, followed by an international bank
  • “As a licensed regulated bank, this is no longer my opinion [that matters] on transparency and public disclosures,” Abra’s CEO told Blockworks

Abra, the crypto exchange and lending platform, is launching the first regulated crypto bank in the United States, the company announced on Monday.

The move, in the eyes of industry players, is a bullish indicator that somewhat shakes the sector’s bear market woes – as well as crypto lenders Celsius and Voyager’s ongoing trips to bankruptcy court.

Abra’s move positions the company in what has been a years-long arms race within crypto to create the first regulated interest-bearing crypto account in the United States – providing consumers with crypto exposures with legal safeguards .

All customer deposits with Abra Bank should be converted into stablecoins which earn interest in the same way as traditional banks. The bank will allow customers to transfer funds in over 100 cryptocurrencies. Abra also partnered with American Express in June to launch a crypto credit card.

Abra Bank’s services – asset custody, lending and staking – are already offered by various other crypto firms, but Abra Bank’s regulatory safeguards set it apart from competitors, according to Abra CEO Bill Barhydt.

“As a regulated licensed bank, this is no longer my view on transparency and public disclosures. Banking laws are taking over and requiring disclosures about assets, liabilities and risk management processes,” said Barhydt at Blockworks.

Abra’s move comes amid Chapter 11 bankruptcy proceedings for Celsius and Voyager Digital, two companies that operated as ersatz banks offering high yields before going bankrupt. Voyager Digital infamously tricked customers into believing that the crypto lender was FDIC insured. Abra seeks to do good on this premise.

In the United States, insured banks must prove to regulators that they have sufficient assets to support their risk profile. Abra has completed this process and expects to launch sometime before the second quarter of 2023.


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  • Jack Kubinec

    blockages

    Editorial intern

    Jack Kubinec is an intern on the editorial team at Blockworks. He is a rising senior at Cornell University where he writes for the Daily Sun and is editor of Cornell Claritas. Contact Jack at [email protected]