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Figure seeks regulatory approval for interest-bearing stablecoin

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Jan 23, 2024
Illustration of several different coins combined to form one glitching coin

Illustration: Annelise Capossela/Axios

Blockchain and lending startup Figure Technologies is seeking U.S. regulatory approval to issue an interest-bearing stablecoin.

Why it matters: If successful, the move would create a new class of stablecoin.

Details: Figure subsidiary Figure Certificate Co. filed a draft registration statement with the SEC in October seeking to register the stablecoin as "face amount" fixed-income securities.

  • Figure's offering would be redeemable at 1 cent per certificate, unlike most stablecoins, which are pegged at a fixed value of $1 each.
  • It would accrue interest daily and be paid out monthly to stablecoin holders.
  • That interest would be derived from reserves, which would include fixed-income securities, commercial paper and corporate debt.

Between the lines: The offering is positioned as a yield-bearing alternative to established stablecoins in the U.S., which are primarily used for transaction settlements or asset transfers.

  • According to the filing, purchasers may be "interested in an instrument that provides yield backed by highly-liquid, investment-grade assets that can be held in a digital format, liquidated on short notice and used in peer-to-peer transactions."

Zoom out: Though multiple interest-bearing stablecoins exist outside the U.S., many issuers have avoided the market for fear of being regulated as securities by the SEC.

  • If approved, Figure hopes to make the stablecoin available to both retail and institutional investors in the U.S.

Yes, but: The chances of approval are uncertain, particularly with a securities regulator that has been reluctant to allow blockchain-based securities to come to market.

State of play: Bloomberg reports that Figure's digital asset arm, Figure Markets, is seeking to raise $50 million at a valuation of $250 million, with Jump Crypto potentially as a lead investor.

  • Previously, it reported that Figure had tapped bankers at Goldman Sachs, JPMorgan Chase and Jefferies to advise on a potential IPO for its lending division.
  • Earlier this month, USDC stablecoin issuer Circle confidentially filed for an IPO.
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