Abra review

Abra Review: Safe, Innovative Wallet for Fiat and Crypto

Abra in Brief

Abra is a bitcoin wallet app for iOS and Android that lets users exchange 54 fiat currencies and 20 cryptocurrencies through peer-to-peer technology.

The decentralized approach — Abra does not have custody of its customers’ assets — makes customers’ money less vulnerable to hacking and exempts Abra from many money-transfer regulations.

Unlike many cryptocurrency exchanges, Abra fully integrates with the US banking systems as well as with banks in the Philippines where Abra first rolled out. American Express even lets US cardholders pay for deposits into the Abra app.

However, the way Abra “stores” currency in a Litecoin wallet and earns revenue on currency trades may not make sense to people that are unfamiliar financial concepts like exchange-traded funds or forex spreads.


  • Direct bank transfers (US and Philippines only).
  • Fund deposits with American Express (US only).
  • Wide selection of fiat currencies and cryptocurrencies.
  • Easy to use mobile apps.
  • Reduces costs of remittances.


  • One device, one account system does not offer cross-platform access.
  • No advanced tools for high-frequency trading.
  • Difficult-to-understand synthetic currency system.
  • Remittance system only fully available in the Philippines.

What is Abra?


Abra is the latest incarnation of CEO Bill Barhydt’s core mission to advance financial inclusion. Among other earlier initiatives, Barhydt was the founder of mobile banking app m-Via (now Boom Financial) and helped the US State Department create the International Diaspora Engagement Alliance which helped immigrants in America stay connected with family in their home countries.

After a year of development, Barhydt and co-founder Jim Robinson announced Abra at the Launch Festival 2015 conference where it won the Best Overall Award. An acronym for A Better Remittance App, their original vision was to use the blockchain to make remittances cheaper and more efficient.

Remittances are the money transfers migrants make to family back home. The World Bank estimates that, in 2017, migrants transferred $585 billion. The cost of making those transfers, however, averaged 7.32% — that is nearly $43 billion that went to middlemen rather than workers’ families.

As Barhydt explained to the organizers of Launch Festival 2015:

“Take the case of Haiti, for example. Haiti relies on money transfers for 35% of its GDP, but after the earthquake people couldn’t get money in…. Cash had to be helicoptered in — and they still couldn’t get it to the right people. If Abra had existed at that time, it would’ve solved all of those problems. How? Because you can use Abra from any smart phone [sic], anyone in Haiti could have acted as a virtual ATM to receive money.”

Wallets and Tellers

The way Abra worked in its first incarnation, was by connecting the digital world of Bitcoin wallets with the real world of fiat currencies. The Abra app is a digital wallet that stores fiat deposits and allows transfers between users. Since the funds are all owned by the users, and not held by Abra, these transfers are not subject to money transmission regulations.

The second piece of the puzzle is a network of “Tellers” that Abra created in the United States and the Philippines. Tellers help Abra users deposit and withdraw cash through face-to-face meetings.

Consider the following example. Bob wants to send $100 to Alice who lives in another country. Bob meets up with a local Abra Teller, Carol, and hands her $100 plus her 1.5% service fee. Carol then transfers $100 in Bitcoins directly to Bob’s Abra app.

Bob transfers the $100 to Alice’s Abra app. Finally, Alice meets up with her local Abra Teller, David. In exchange for the $100 in Bitcoins and a 1.5% service fee, David hands Alice $100 in cash.

The service fees in this example burden the remittance with $3 in costs instead of the $7.32 the World Bank estimate would predict. Multiply those savings by the billions of dollars flowing across borders every year and it’s not hard to see how big an impact Abra could have had.

From remittances to cryptobank

Abra benefits
Source: Abra

Abra slowly rolled out to customers in late 2015 before its worldwide public release in mid-2016. By 2017, however, Abra began to pivot. As Barhydt explained to Jason Calacanis in a recent This Week in Startups podcast, the Teller-based system worked, but it didn’t scale.

“What we found was, in order to get Abra to work at reasonable scale, the amount of money it was going to take to deploy these Tellers was analogous to what it costs Uber to deploy drivers all over the world at once.”

Barhydt noticed that Abra’s user base extended beyond the original remittance-sending target group. These new customers were cryptocurrency enthusiasts drawn to Abra’s simplicity and didn’t need the Teller system at all.

Abra began its evolution beyond remittances in early 2017 when it first allowed customers to buy and sell Bitcoins. Over the course of the year, Abra added the ability to transfer dollars in and out of the wallet using ACH bank transfers and to make deposits using an American Express card. In late 2017, Abra shut down the Teller system everywhere except in the Philippines.

The transformation of Abra into a cryptobank took its biggest step in March 2018 when Abra upgraded to support exchanges between 20 cryptocurrencies and more than 50 fiat currencies at the press of a button.

How Abra works

Before we go any further, we need to look at how the Abra app works and understand how it is fundamentally different from crypto exchanges like Coinbase. All of your balances, whether fiat or crypto, are really “synthetic” currencies.

When you make a deposit into Abra, the system actually purchases the equivalent amount of Litecoins. The app, however, displays your holdings as balances in the original currency. When you make a trade, your balances will show in each currency. Yet Abra holds everything as Litecoins.

Let’s say you deposit $100 USD into your Abra wallet and then buy $50 worth of Ether. Depending on the exchange rate, the Abra app will show balances of $50 USD and 0.00987 ETH and a zero balance for Litecoin. Under the hood, however, the Litecoin blockchain has registered your ownership of 0.7764 LTC.

Abra uses Litecoin’s support for multi-sig smart contracts to create a “synthetic digital asset”. When you make a deposit, the smart contract locks the balance of your synthetic currency. Abra implements a sophisticated series of hedges on crypto exchanges to protect its customers and itself from swings in the exchange rate.

Barhydt tried to explain the complex structure in a recent Reddit AMA (lightly edited for capitalization):

“Abra then manages its own counterparty risk on the long side by hedging away that risk in real time…. [This] eliminates any counterparty risk to the consumer in terms of Abra not being able to make the consumer whole in a down market.”

So far, that system seems to have worked, Barhydt concluded:

“In the current down market we had consumers who were hedged in fiat vs Bitcoin for $millions and Abra’s system worked perfectly and we didn’t lose a penny and were still able to make the consumer whole.”

Leadership and investors

Abra Advisors
Source: Abra

Barhydt founded Abra along with RRE Ventures angel investor Jim Robinson IV. Barhydt brought experience as an entrepreneur in the financial technology space along with credibility in the cryptocurrency community. Robinson brought his 30-year career as a tech-industry VC.

  • Bill Barhydt, chief executive officer: Barhydt spent his early career at the CIA and NASA before moving into the Silicon Valley startup scene. A serial entrepreneur, Barhydt most recently founded Boom Financial.
  • Jim Robinson IV, director and co-founder: Robinson led early investments in Ripple and other cryptocurrency startups.
  • Daryl Puryear, chief technology officer: Puryear joined Abra after stints leading financial software engineering teams at Mint, Intuit and Motif.

Advisors and investors

Abra’s slate of advisors extends from the heart of traditional corporate America to the cutting edge of cryptographic research. Among Abra’s advisors, you will find:

  • Jim Robinson III, General Partner at RRE Ventures: Robinson is a former CEO of American Express.
  • Hans Morris, Managing Partner at Nyca Partners: Morris is a former President of Visa.
  • Wei Hopeman, Managing Partner at Arbor Ventures: Hopeman is a former Managing Director of Citi Ventures.
  • Dan Boneh, Professor at Stanford University: Boneh’s research focuses on the use of cryptography in computer security. Boneh leads Stanford’s Advanced Cryptography Group

Abra closed its Series A financing round in September 2015. Led by Arbor Ventures, RRE Ventures and First Round Capital, investors funneled more than $14 million into the startup.

American Express Ventures invested in Abra during the Series A round and actively supported the company by making it the first crypto company to accept American Express. Abra’s announcement quoted American Express Ventures Managing Partner Harshul Sanghi:

“As people and businesses transact more globally, there’s a need for more convenient and affordable ways to move money, and we think the blockchain could play an important role in the evolution of money transfer and commerce, especially in emerging markets.”

In late 2017, Abra closed its Series B round at $16 million, let by Foxconn venture arm HCM International. The announcement quoted HCM Managing Partner Jack Lee saying:

“Abra’s vision for a decentralized network of people, merchants and consumer devices all connected via Internet-based open blockchain technology can usher in a new era of financial inclusion and access to capital for billion of consumers.”

Protecting customers’ coins

Legal and regulatory compliance

Centralized exchanges in the United States and elsewhere run into issues with money transfer regulations. Since these exchanges hold their customers’ fiat currencies and digital assets, they must comply with a state or nation’s regulations.

Those regulations do not apply to Abra since the company never takes custody of its customers’ assets. As long as ownership and purchase of cryptocurrencies are legal in the jurisdiction where customers live, Abra’s users are free to exchange money.

Abra is connected through Synapse Fi, a banking software provider, to the FDIC-insured Evolve Bank. That connection lets Abra access the ACH clearing system so it can treat US customers’ bank transactions as electronic deposits and withdrawals. Among the major US banks that allow Abra transactions are Bank of America, Citibank, Capital One and Chase.

Abra is registered with the SEC Philippines and is authorized to operate locally. Most of the Philippines’ major banks, including BDO and BPI, support Abra electronic transactions.

Coin listing policies

Abra does not discuss the criteria it applies when adding altcoins to its app. The March 2018 announcement of Abra’s support for altcoins, however, did say that Abra conducts “rigid analysis around liquidity, contract market making and other factors.”

During his appearance on This Week in Startups, Barhydt said that the Abra business model depends on having access to highly-liquid markets. “If [altcoins are] not liquid we can’t support them because our market-making system won’t work.”

Network security

By decentralizing everything, Abra protects customers digital assets from attempts to hack Abra’s servers. Everything is stored on the customer’s smartphone in the Abra app.

The only customer information Abra keeps on its servers are name, email address and telephone number as well as a link between that telephone number and the public key of that customer’s Abra wallet.

The downside to this approach is that customers could lose everything if their phone is lost or stolen. For that matter, upgrading to a new phone becomes an issue as installing the Abra app creates a different wallet.

There is a way to restore a wallet or transfer a wallet to a new device. The Abra app generates a random, 13-word recovery phrase during the backup process. Entering that recovery phrase into the app will restore the backup.

“Users are strongly advised to write down their recovery phrase, and store it in a secured location, to avoid losing access to their funds.”

Customer support

Abra has an online self-help site. Customers can also start chat sessions with Abra’s support staff through the website.

Abra reputation

Abra’s growing popularity is driven by the simplicity of the smartphone app’s interface. Abra is one of the easiest ways for people to quickly and easily get Bitcoins or Litecoins.

That same simplification drives many of the complaints you’ll see in various forums. The first thing you’ll see on Abra’s website are the words “Buy, store, and invest in cryptocurrencies. 20 coins. One app.” That creates the impression that the Abra app actually holds those coins rather than the equivalent value in Litecoins or Bitcoins. Users don’t understand why they have to “convert” their Ethereum, for example, into Bitcoins to make a withdrawal.

How to Join Abra

Abra available worldwide
Source: Abra

Who can join?

Abra is available worldwide. However, Abra’s features vary depending on which country you live in. Card-based transactions are only available in the United States. Cash-based transactions are only available in the Philippines. Bank transfers are only available in the United States and the Philippines.

Abra is not available in countries subject to US sanctions such as North Korea and Iran.


Abra does not require verification to set up the app or make transactions. In “select cases”, however, Abra may need to ask for ID verification.

What Can You Trade on Abra?

Altcoins on Abra
Source: Abra


Abra supports 20 cryptocurrencies including Bitcoin, Dash, Ethereum, Litecoin and Ripple.

Fiat currencies

Abra supports 54 fiat currencies, including the US dollar, Canadian dollar, euro, British pound, Chinese yuan renminbi and Indian rupee.

Currency exchanges

Buying and selling non-Bitcoin cryptocurrencies is limited to the equivalent of 1 Bitcoin per day. There is no limit to the size or frequency of Bitcoin transactions.

Advanced trading

Abra does not offer any advanced trading tools as its target customers are consumers with a buy-and-hold mindset.

Trading Tools and Fees

Unlike other exchanges which have taken a web-only approach to their trading apps, Abra is an exclusively mobile service. You can only access Abra through its apps for iOS or Android. There is a downside to this decentralized approach — you do not have a central Abra account. That means when you install the Abra app on a second device, you are creating a brand new wallet.

‘When you first launch the Abra app, you’re asked to enter your name, email address and mobile number. For most people, that will be all the identification data Abra needs. This is also when you have a chance to get your recovery phrase.

Setting up Abra’s app
Source: CoinIQ

The interface itself is very straightforward. The home screen displays your fiat and crypto balances. Another screen lets you deposit your fiat currency and another lets you trade for other currencies.

The UI of Abra’s app
Source: CoinIQ

Mobile app support

Abra’s apps are available on the Google Play Store for Android and the Apple App Store for iOS. Both apps get overwhelmingly positive reviews. The Android app has a 3.9-star rating. Of the 1,846 reviews, more than 1,300 award Abra either 4 stars or 5 stars. The iOS app does even better with a 4.4-star rating, Most of the roughly 1,700 reviews are either 4 or 5 stars.

Deposits and withdrawals

Depositing cash in Abra
Source: Abra

Abra does not charge for deposits or withdrawals. However, you will still see fees applied to certain transactions. “We generally don’t make a profit on fees,” one of Abra’s support pages explains, “we’re just passing through a fee that we incur.”

You might be wondering how Abra makes money if the company does not charge for its app, does not require subscriptions and does not charge transaction fees.

Abra makes its money on the foreign exchange spreads whenever customers change currencies. Abra takes the market spot price and sets an exchange rate that’s slightly higher for currency purchases and slightly lower for currency sales.

This is the same way that an airport currency exchange booth works.

Fiat currencies

Abra imposes limits on the size and frequency of fiat transfers. Direct ACH bank transfers must be at least $1,000 and no more than $2,000 per day, $2,000 to $4,000 weekly, and $4,000 to $8,000 monthly. Higher limits are possible with ID verification on a case-by-case basis.

US bank wires must be at least $2,000 and no more than $30,000 per day. Abra does not charge deposit or withdrawal fees on bank transfers, but your bank may charge you for the transaction.

American Express imposes $200-per-day and $1,000-per-month limits on payments to Abra. Note that this is inclusive of American Express’ 4% “convenience fee”. If you try to make a $200 AmEx deposit in your Abra wallet, you will exceed the limit and could be barred from further AmEx transactions.

One other note on American Express deposits. You cannot use AmEx corporate cards, gift cards or loyalty cards with Abra.

Abra does not limit the size of Teller-based transfers, but individual Tellers may have their own policies. Teller-based deposits and withdrawals in the Philippines incur transaction fees from 1% to 2% depending on the Teller.

Digital currencies

Abra is a Bitcoin and Litecoin wallet, so it only lets you deposit and withdraw those cryptocurrencies. Over time, Abra plans to support more altcoins natively.

Bitcoin and Litecoin deposits are free, but withdrawals incur a network fee from the blockchain, which Abra passes through to the customer.

The skyrocketing network fees on the Bitcoin blockchain is one of the reasons Abra is migrating its system to Litecoin. When the crypto markets start heating up again, Litecoin’s processing fees will always be much lower than Bitcoin’s.

Transaction fees

Abra does not charge transaction fees, but does set a $5 minimum transaction amount.

Final Word

Abra created an easy, secure way for people to buy into crypto markets — almost accidentally. Although making remittances easier and more affordable remains its founder’s long-term mission, in the near-term Abra serves its users’ need for a decentralized cryptobank.

For new traders

Americans and Filipinos, in particular, will appreciate how easy it is to move money in and out of their Abra wallets using fast bank transfers. In addition, Abra’s hedging strategy minimizes their exposure to the market’s volatility.

For advanced traders

Abra serves customers with a buy-and-hold approach to crypto-investing. Anyone looking to make a profit on day trading may be better off going with one of the centralized exchanges that offer more advanced tools.

Christopher Casper

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