In a ‘path-finding’ move — one that marks a significant milestone for corporations looking to embrace the crypto revolution — Abra, a platform specializing in digital asset services and wealth management, has unveiled a new offering. This service, known as ‘Abra Treasury’, is tailored for corporations wishing to include cryptocurrency in their balance sheets as a reserve asset.
JUST IN Abra rolls out a new Treasury Service for businesses, family offices, and nonprofits to manage their cryptocurrency holdings efficiently. #Crypto #TreasuryManagement #DigitalAssets
— THΞ FΞNNΞC (@FennecSpirit) July 1, 2024
The Services Offered by Abra Treasury
Abra Treasury is managed by Abra Capital Management, an investment advisor registered with the SEC. The service merges custody (the secure storage of digital assets), trading (the exchange of cryptocurrencies), borrowing (securing loans against crypto holdings), and yield services (earning interest on crypto assets). This comprehensive service allows clients to securely store their cryptocurrencies in individually managed accounts, ensuring they maintain ownership and control over their digital assets.
Rising Trend of Bitcoin as a Reserve Asset
The current volatile macroeconomic climate, marked by rising inflation and geopolitical unrest, has led some corporate treasurers to consider adding bitcoin (BTC) to their reserve assets. MicroStrategy (MSTR), a software firm listed on Nasdaq and led by Michael Saylor, is the largest corporate holder of BTC, with a total of 226,331 tokens.
Interest of Non-Crypto-Native Businesses in Bitcoin
Marissa Kim, the head of asset management at Abra Capital Management, highlighted the growing trend of non-crypto-native businesses expressing interest in using Bitcoin as a treasury reserve asset. “We are increasingly seeing clients that are business owners and CEOs of small to medium-sized businesses (SMBs), particularly real estate companies, with interest in buying BTC for their treasury or borrowing against BTC to finance business needs or real estate projects, which we did not see last cycle,” Kim said.
Abra’s Settlement with Financial Regulators
However, Abra’s journey hasn’t been without its challenges. The company and its founder and CEO, William “Bill” Barhydt, recently reached a settlement for a fine with 25 state financial regulators, a press release from the Conference of State Bank Supervisors (CSBS) stated. As part of the settlement agreement, Abra will return up to $82.1 million in crypto to U.S. customers in the settling states.
Other Companies Exploring Crypto Treasury Services
Interestingly, Abra is not alone in this daunting quest. In addition to Abra, several other companies are exploring crypto treasury services, recognizing the potential of digital assets as a reserve.
Notable firms like MicroStrategy and Tesla have already made headlines with their significant Bitcoin purchases. Goldman Sachs, the multinational investment bank and financial services company, is not left out, as it now offers investment in underlying and derivatives markets for cryptocurrencies.
Finally, there is Genesis Trading, a prime brokerage for digital assets, which is seeing increased global interest by corporate treasurers across all its products and services. And the list goes on…
These companies are leading the charge in the new digital economy, accelerating the process of corporate investment in digital assets. As the crypto and banking worlds continue to blossom, they need to be ready to service these newfound needs.
As the old saying goes, “fortune favors the brave,” and Abra’s brave move could well be a turning point in how the corporate world views crypto assets.
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