Mobile Bitcoin Wallet Abra has launched a trading platform on their existing app where they’re launching 20 Cryptocurrencies and 50 Fiat currencies. The service will be non-cordial, meaning all funds are stored by the users. There is no fear of Abra being hacked to steal cryptocurrencies.
Users will be able to trade across these currencies efficiently on the app. Abra would not hold liquidity for these coins. The only cryptocurrency you can deposit and withdraw right now is Bitcoin. For fiat currencies, you can only use the US dollar and Philippine Piso. So the remaining 67 currencies, they are artificially created using smart contracts and settled with Bitcoin.
Commenting on this, the official statement said “These multi-sig contracts based on P2SH scripts on the Litecoin and Bitcoin blockchains simulate investment contracts the way a gold ETF is a contract based on USD. In the case of a gold contract, if the value of gold goes up, the user gets more USD, and if the value of gold goes down, the user loses USD. Abra is doing the same thing but using Litecoin and Bitcoin instead of USD with Abra acting as the counterparty (i.e. the other signatory) to the P2SH scripts. Abra now runs a market making operation that hedges away our counterparty risk on these scripts. We’ve been running this operation to manage fiat, Bitcoin and ether counterparty risk for over a year now with no service interruptions. We’ve extended this market making capability to include the altcoins launched today.”
Like Circle’s recently launched cryptocurrency exchange, Abra also claims they will not be collecting any fee on trades. There is a small spread between buy and sell prices where they make their profits.
The app is available worldwide fr everyone to use. But only users from US and Philippines will be able to deposit and withdraw fiat currencies. Others will only be able to use Bitcoin. For now, Abra’s usage is limited and it does not offer a lot that other larger cryptocurrency exchanges already offer.