For years, Bitcoin has been offered as a solution for cross-border payments. After all, Bitcoin is a payment network whose only boundary is the edges of the internet, which is becoming more widely available every day. However there have always been challenges for individuals and companies attempting to use Bitcoin for this purpose: how do you get money in and out of the network? How do you handle slippage and price volatility?
Even as Bitcoin exchanges have proliferated around the globe, the answers to these questions have been less than clear. The reality is that except in a limited number of highly liquid corridors – corridors that are likely already well-served by incumbent money transfer services – Bitcoin remains a less-than-perfect solution for cross-border payments. The mere thought of having to understand Bitcoin is often enough for the layperson to be scared off.
In addition to cross-border payments, many see Bitcoin as a solution for the unbanked. Since anyone with a smartphone and a data plan can download a Bitcoin wallet, the theory goes that the unbanked can use Bitcoin as an alternative to banks as a means of storing their wealth safely and making electronic payments. As decreasing costs for both devices and data make smartphones more accessible to a larger percentage of the population, a digital stored value solution becomes even more feasible.
The biggest challenge here is that exchange rate volatility currently makes bitcoin a poor store of value, at least if your time horizon is measured in months, weeks, or even days, as it is for people who get paid daily or (bi)weekly and pay their rent or mortgage monthly. While the long-term trend of the bitcoin price has been upwards, short-term it is common for bitcoin to fluctuate 15-20% in value in the span of days. This simply isn’t a good solution for people who are already struggling financially – and make no mistake, this is a great many people, even in the developed world.
Is there a solution to these problems? After learning more about how Abra works, I’m excited to say that there is, and Abra is making meaningful progress towards delivering that solution to the world.
The vision of Abra is to empower anyone to send a payment from one smartphone to another, regardless of who the sender and recipient are or where they’re located. The way Abra realizes this vision is with a wallet app that leverages Bitcoin to provide a secure means of storing and transferring value, and a network of cash Tellers and exchange partners that connect the banked and unbanked populations together. A clever use of Bitcoin smart contracts will ensure that the value in someone’s Abra wallet is always what they expect if they choose to hold their value in a fiat currency, and Abra’s exchange integrations will make cross-currency transactions seamless and affordable for senders and recipients.
What Abra is building is incredibly exciting to me as a real solution for sending money from anywhere to anywhere by leveraging the liquidity and security of the Bitcoin network. I started the Buttonwood SF bitcoin trading meetup to provide a safe and accessible way for people in my local community to move cash in and out of the Bitcoin network, and now I’m excited to continue that work by joining Abra to help extend those on- and off-ramps globally. Once this work is complete, the “last mile” problem of getting cash from digital payments into the hands of the unbanked will begin to be solved, and sending money to anyone, anywhere in the world will be as easy and inexpensive as sending a text message.
If you’re interested in helping Abra fulfill this vision, we invite you to join us – we’re hiring!