Figure Technologies proposes first regulated US stablecoin 

credit: Shutterstock
credit: Shutterstock

Finance startup Figure Technologies is seeking approval from the US Securities and Exchange Commission (SEC) to launch an interest-bearing stablecoin. 

An SEC filing revealed that Figure is aiming to issue the proposed stablecoin by adding interest and will fall under securities law, which would become the first regulated stablecoin in the US. 

The proposed stablecoin will be listed as a “face-amount certificates” fixed-income securities run on blockchain technology. Figure also intends for the digital currency to be distributed to institutional and retail investors. 

According to Bloomberg, funding for the stablecoin project will come from Figure’s digital asset entity, Figure Markets, projecting to raise $50m at a valuation of $250m. This funding round also serves as an incentive to shed more light on Figure Markets and potential investors, with Jump Crypto being identified as a potential lead investor. 

What makes the proposed Figure stablecoin different from the world’s most popular stablecoins, such as USDT and USDC, is it plans to offer interest off the back of transactions. 

Furthermore, whilst USDT and USDC is 1:1 backed by the US dollar, the newly proposed stablecoin intends to be 1% certificate backed, with a $1 payment requiring 100 certificates to be transferred with interest attached on a monthly basis. 

The SEC filing explained that users will have to complete a KYC process to sign up to the stablecoin, however it remains uncertain whether the US financial regulator would approve. 

Gary Gensler, Chair of the SEC, has vehemently opposed cryptocurrencies and has viewed them as securities which must fall under typical financial institution rules and regulations. 

Whilst stablecoins are often viewed as a safer and more stable option to other cryptocurrencies, regulators across the globe are wary they may cause instability to their overall financial system, especially if the company or issuer of the stablecoin becomes bankrupt. 

However, the recent Bitcoin ETF approval may be the silver lining the US crypto market has been looking for from the SEC. 

Despite Gensler making it clear that the Bitcoin ETF is in ‘no way a signal of the willingness to approve listing standards for crypto asset securities,’ a securities registered stablecoin like the one proposed by Figure may align with its views on the crypto.