Figure Technologies Inc., led by former SoFi CEO Mike Cagney, is pursuing U.S. regulatory approval for an innovative stablecoin.
This stablecoin, unique in its nature, aims to earn interest. If approved, it will become the first stablecoin in the U.S. regulated as a security.
Figure’s subsidiary, Figure Certificate Co., submitted a preliminary registration to the SEC in October.
The submission details Figure’s intention to classify the stablecoin as fixed-income security certificates.
It plans to issue them using blockchain technology. Upon approval, this stablecoin will be available to both U.S. retail and institutional investors.
Figure Markets, the company’s digital assets arm, is aiming to raise $50 million, valuing it at $250 million, excluding the raised amount.
Jump Crypto might lead this investment round, as indicated by insiders. The capital raised will support the operations of Figure Markets.
Both Figure and Jump have chosen not to comment on these developments.
Currently, the stablecoin market, led by tokens like Tether’s USDT and Circle’s USD Coin, does not offer interest.
in addition, These tokens tied to assets like the U.S. dollar, mainly facilitate cryptocurrency trading and asset transfers between exchanges.
Internationally, interest-bearing stablecoins exist, but U.S. issuers often avoid them due to potential SEC regulations. Figure’s stablecoin seeks to provide an alternative for payments and transaction settlements.
It appeals to those interested in a digital, yield-generating instrument backed by liquid, investment-grade assets.
Figure’s stablecoin differs from typical $1-valued stablecoins. The redemption rate is 1 cent per certificate, requiring 100 certificates for a $1 payment. Interest accrues daily and is paid to the holder monthly.
This interest will be sourced from a reserve consisting of Treasury bills, commercial paper, and corporate debt. To acquire these stablecoins, holders must complete a customer knowledge process.
Regulatory Landscape and Potential Impact
While Figure’s approval is uncertain, the application could intensify the debate on stablecoin regulation in the U.S. Past legislative attempts to regulate stablecoins have failed, but they remain a focus for President Joe Biden.
Circle recently filed for a confidential IPO, over a year after canceling its previous public offering plan.
In addition to this stablecoin, Figure is applying to register Figure Installment Certificates. This offering is tailored for investors desiring digital asset returns.
Established in 2018 by Cagney, Figure leverages blockchain to create financial products, including loan origination.
In short, Figure’s LendCo is currently coordinating with banks for a potential IPO, as per Bloomberg reports.