Wealth Management Platform Abra Launches Crypto Treasury Services for Corporates

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As an analyst with a background in financial markets and experience in the digital asset space, I find Abra’s announcement of Abra Treasury to be a significant development in the corporate adoption of crypto. The combination of trading, borrowing, custody, and yield services offered by this service caters to the growing demand among corporates to seek exposure to digital assets amid rising macro uncertainty.

On July 1, 2023, Abra, a leading digital asset prime services and wealth management platform, unveiled Abra Treasury. This new offering is designed to cater to corporations seeking to safeguard cryptocurrencies as part of their financial holdings.

An SEC-registered investment firm called Abra Capital Management will oversee the provision of various digital asset treasury management services. These offerings are designed for family offices, corporations, and non-profit organizations.

Abra Treasury’s proposition is quite intriguing. It brings together trading, lending, safekeeping, and earning opportunities in a single package. Additionally, clients will have the power to manage their own digital asset accounts separately, maintaining ownership and title over their investments.

The new trend arises from increasing corporate interest in digital assets due to heightened economic instability. Furthermore, escalating inflation and geopolitical conflicts have compelled certain corporate treasurers to explore holding Bitcoin as a potential reserve asset for their portfolios. Marissa Kim, Abra Capital Management’s head of asset management, commented on the emerging trend:

A notable indicator of the maturation and acceptance of the digital asset sector is the growing number of traditional businesses, who are not originally part of the crypto industry, expressing an inclination towards utilizing bitcoin as a component of their treasury reserves. This trend is becoming more prevalent among small to medium-sized enterprises (SMBs), specifically those in the real estate sector. In contrast to the previous market cycle, we’re witnessing a surge in interest from business owners and CEOs regarding the acquisition of BTC for their corporate treasuries or securing financing through BTC loans for business requirements or property projects.

Recently, Abra encountered regulatory issues that required them to operate their mobile app without the necessary licenses. Consequently, Abra’s founder, Bill Barhydt, reached an agreement with 25 state financial regulators in the United States, resulting in a payment of approximately $82.1 million in cryptocurrency to affected customers within those states.

Corporate Adoption of Crypto

Companies such as MicroStrategy in the United States have begun incorporating Bitcoin into their financial reserves. Over the past four years, MicroStrategy has amassed a total of 226,331 Bitcoins through acquisition.

Companies worldwide have been pondering a similar shift for some time now. For instance, over the past two months, Metaplanet, a Japanese public-listed firm, has purchased Bitcoins as part of its financial reserves. Today, they announced the acquisition of approximately 200 million yen‘s worth of Bitcoin, bringing their total holdings to over 161 million yen.

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2024-07-01 15:30