Figure Technologies Ventures into Uncharted Territory with SEC Approval Bid for Interest-Bearing Stablecoin

Figure Technologies Aims to Redefine Stablecoins, Seeks SEC Approval for Interest-Bearing Digital Currency

Jan 23, 2024
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Fintech pioneer Mike Cagney's Figure Technologies eyes regulatory approval for innovative interest-bearing stablecoin.

Figure Technologies Inc., led by former SoFi Technologies CEO Mike Cagney, is pioneering a groundbreaking financial product in the digital currency space. The fintech firm is currently in the process of seeking approval from the U.S. Securities and Exchange Commission (SEC) for what could potentially become the first-ever interest-bearing stablecoin regulated as a security in the United States.

As reported by Bloomberg, Figure Technologies filed a draft registration statement with the SEC in October through its subsidiary, Figure Certificate Co. The filing outlines an ambitious plan to categorize this new stablecoin as "face-amount certificates," positioning it as a distinctive form of fixed-income security.

This approach represents a notable departure from the standard set by dominant stablecoins like Tether's USDT and Circle's USDC, which do not offer interest to holders. The proposed stablecoin from Figure Technologies is designed to provide interest, accruing daily and payable monthly to holders. The interest will be sourced from a diversified reserve that includes treasury securities, commercial paper, corporate debt, and similar assets.

What sets this stablecoin apart further is its redemption value of 1 cent per certificate, requiring the transfer of 100 certificates for a $1 payment. This feature aligns with Figure's vision to offer a stablecoin that not only generates yield but is also conducive to quick liquidation and peer-to-peer transactions.

Figure Markets, the digital asset division of Figure Technologies, is set to raise $50 million at a valuation of $250 million. Notably, the funding round may witness substantial investment from Jump Crypto, although neither Figure nor Jump Crypto has officially commented on the matter.

The potential SEC approval of Figure's innovative stablecoin is poised to spark significant discussions about the regulation of stablecoins in the U.S., a topic that has gained traction among lawmakers and the Biden administration. This development signals a potential shift in the landscape of digital asset offerings.

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