Figure seeks regulatory approval for interest-bearing stablecoin
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.