Mike Cagney has been here before, but not on blockchain.
In the early 2010s, SoFi helped reshape consumer finance by directly connecting borrowers with capital. He said he is now trying to do something similar on a much larger scale at Figure Technology Solutions (FIGR): rebuilding the infrastructure of the credit markets themselves.
The plan might work. Monthly loan volume exceeded $1 billion for the first time in March, bringing the company’s annual loan volume to about $12 billion, out of $2.9 billion in the first quarter.
Cagney, who will be speaking at the Consensus Miami conference next week, told CoinDesk that the goal is to build new plumbing into these markets.
“We are building a marketplace where credit can move efficiently without the need for all the traditional layers,” he said.
Three levers that create value
Cagney divided Figure’s model into three main advantages.
The first is cost. Loan tokenization reduces the friction and costs associated with securitization and removes intermediaries that traditionally collect hefty fees.
The second is liquidity. Figure is what the company has built to be one of the only continuously updated consumer credit marketplaces outside of government-backed mortgage systems like Fannie Mae and Freddie Mac.
“The loans are updated in real time, which creates a different kind of market,” Cagney said.
The third is access. By bringing these assets on-chain, Figure will connect them to decentralized finance (DeFi), allowing a wider range of investors to gain exposure and borrow assets.
According to Cagney, this is where the model starts to blur the lines between traditional finance and cryptocurrencies.
Mr. Figure’s latest effort is what Cagney calls “democratizing prime,” essentially opening up prime brokerage-style lending to a wider audience.
Through products like the Forge platform, loans are pooled into standardized vaults and converted into tokens that can be used as collateral in DeFi protocols. Standardization is the key.
“DeFi only works when the collateral is liquid and transparent,” he said.
Figure has launched related efforts on networks such as Solana, and has plans to expand to Ethereum, allowing users to invest in and borrow against tokenized credit pools.
The company is experimenting with more than just loans.
The company has introduced a high-yield stablecoin (YLDS) backed by traditional assets like U.S. Treasuries, with around $600 million outstanding, issuance of its own shares on-chain in a way that investors can lend directly, and is exploring tokenized equity.
Mr. Cagney pointed out the inefficiency of traditional markets. While stock loans may offer borrowing interest rates of 30% or more, investors often receive only a fraction of that yield.
“We can put that value back into the hands of the asset owner,” he said.
practical blockchain
Despite all his ambitions, Cagney is quick to draw boundaries.
Not everything belongs on-chain, he said. For example, tokenizing real estate itself may not be an efficient use of capital. But financial abstractions – loans, securities, stocks – are a different story.
This pragmatism reflects a broader criticism of the crypto industry, which often pursues ideas without a clear economic rationale, he said.
“A lot of it was done just for that,” he said. “The important question is whether this actually improves the system.”
This growth in numbers suggests that, at least in one corner of the market, the answer may be yes. The company is growing in profitability and scale, with cumulative originations approaching $30 billion. This is still small compared to traditional finance, but it’s large enough to get noticed.
Cagney said he believes there is still room for improvement.
“Blockchain is the most transformative technology and will reallocate more public market capitalization than any other technology to date,” he said. “When it becomes ubiquitous, there’s a whole industry that disappears. Someone has to do the work to get there. And that’s exactly what we’re doing.”
Read more: Private credit could be a breakthrough use case for tokenization: Maple’s Sidney Powell
