Abra Launching First US Regulated Crypto Bank

key takeaways

Abra Bank will launch in the US during Q1 2023, with an international bank to follow
“As a regulated licensed bank, it’s 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 US regulated crypto bank, the company said Monday.

The move, in the eyes of industry participants, is a bullish indicator that somewhat shakes off the sector’s bear market woes — plus the pending trips of crypto lenders Celsius and Voyager to bankruptcy court.

Abra’s move positions the company in what has been a yearslong arms race within crypto to create the first US regulated interest-bearing crypto account — offering consumers crypto exposures with legal safeguards.

All customer deposits into Abra Bank are set to be converted into stablecoins that accrue interest similarly to traditional banks. The bank will allow customers to transfer funds into 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 a variety of other crypto firms, but Abra Bank’s regulatory guardrails make it stand out from competitors, according to Abra CEO Bill Barhydt.

“As a regulated licensed bank, it’s no longer my opinion on transparency and public disclosures. The banking laws take over and require disclosures on assets, liabilities and risk management processes,” Barhydt told Blockworks.

Abra’s maneuver comes amid Chapter 11 bankruptcy proceedings for Celsius and Voyager Digital, two companies that operated as ersatz banks offering high yields before going belly-up. Voyager Digital infamously misled customers to believe the crypto lender was FDIC insured. Abra is looking to make good on that premise.

In the US, insured banks must prove to regulators they have enough assets available to support their risk profile. Abra has completed this process and plans to launch sometime before the second quarter of 2023.

Get the news in your inbox. Explore Blockworks newsletters:

Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
Empire: Start your morning with the top news and analysis to inform your day in crypto.
Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
The Drop: For crypto collectors and traders, covering apps, games, memes and more.
Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.