Once again, Mike Cagney is at the forefront of innovation, this time utilizing blockchain to revolutionize credit markets. Previously, in the early 2010s, he reshaped consumer lending by enabling direct connections between borrowers and capital through SoFi. At Figure Technology Solutions (FIGR), he aims to achieve a similar transformation on a grander scale by overhauling the very infrastructure of these markets.
Cagney’s efforts seem promising as Figure achieved $1 billion in monthly loan originations for the first time in March, contributing to a robust $2.9 billion quarter and placing the firm at approximately $12 billion in annualized volume. Speaking at next week’s Consensus Miami conference, Cagney emphasized his goal of constructing a new framework for credit markets.
“We are creating a marketplace where credit can flow efficiently without traditional intermediary layers,” he explained to CoinDesk.
Cagney outlined three primary benefits of Figure’s approach:
Firstly, cost: By tokenizing loans, the process eliminates much of the securitization friction and expense, bypassing intermediaries who typically charge substantial fees.
Secondly, liquidity: The firm has established one of the few continuously updating consumer credit marketplaces outside government-backed systems like Fannie Mae and Freddie Mac.
“Our loans update in real time, fostering a unique market,” Cagney noted.
Thirdly, access: Onboarding assets onchain allows them to integrate into decentralized finance (DeFi), broadening the range of investors who can engage with these assets or borrow against them. This integration blurs traditional financial boundaries with crypto.
Cagney is currently pushing towards a “democratized prime” model, offering broader access to prime brokerage-style lending through platforms like Forge. These loans are pooled into standardized vaults and converted into tokens usable as DeFi collateral. Standardization here is essential because “DeFi functions only if the collateral remains liquid and transparent,” he said.
Figure has also expanded its initiatives across networks such as Solana, with plans to extend to Ethereum. This allows users to invest in tokenized credit pools or use them for borrowing purposes. Beyond loans, Figure is exploring other areas, introducing a yield-bearing stablecoin, YLDS, supported by traditional assets like Treasurys and boasting about $600 million in balances. They are also considering tokenized equities, issuing onchain stock that enables direct lending by investors.
Cagney pointed out inefficiencies within traditional markets, noting how stock lending can have borrow rates exceeding 30% while yields to investors remain significantly lower.
“We aim to return this value to asset owners,” he explained.
Despite his ambitious vision, Cagney maintains a realistic view of blockchain’s role, acknowledging that not every asset should be tokenized. For instance, property tokenization might not be capital-efficient, but financial instruments like loans and securities are viable candidates.
This pragmatism extends to a critique of the broader crypto industry, which he believes has often pursued ideas lacking economic foundation.
“Many initiatives were undertaken without clear purpose,” Cagney remarked. “The essential question is whether these innovations genuinely enhance the system.”
With its rapid growth and profitability, Figure’s achievements suggest blockchain can indeed offer substantial improvements in certain market sectors. The firm approaches $30 billion in cumulative originations, a significant figure within traditional finance contexts.
Cagney remains optimistic about further expansion.
“Blockchain stands as one of the most transformative technologies, poised to reallocate more public market capital than any other technology has before,” he said. “Industries will vanish as it becomes widespread. We are committed to leading this transformation.”