Mike Cagney has been here before, but not with blockchain.
In the early 2010s, he helped reshape consumer lending with SoFi by directly connecting borrowers to capital. Now at Figure Technology Solutions (FIGR), he said he’s trying to do something similar on a much larger scale: rebuilding the infrastructure of the credit markets themselves.
Maybe the plan is working. That number surpassed $1 billion in monthly loans for the first time in March, part of a $2.9 billion first quarter that puts the company on annualized volume of about $12 billion.
Cagney, who will speak at the Consensus conference in Miami next week, told CoinDesk the goal is to build new plumbing for these markets.
“We are building a market where credit can flow efficiently, without all the traditional layers,” he said.
Three levers of value
Cagney divided the Figure model into three fundamental advantages.
The first is cost. Loan tokenization reduces the friction and expense of securitization, eliminating middlemen who historically took large fees.
The second is liquidity. Figure has built what it describes as one of the only constantly updated consumer credit markets outside of government-backed mortgage systems like Fannie Mae and Freddie Mac.
“The loans are updated in real time, which creates a different type of market,” Cagney said.
The third is access. By putting these assets on-chain, Figure can connect them to decentralized finance (DeFi), allowing a wider range of investors to gain exposure to or borrow against them.
This is where the model begins to blur the line between traditional finance and crypto, Cagney said.
Figure’s latest initiative involves what Cagney calls “democratized prime,” essentially opening up prime brokerage lending to a wider audience.
Through products like its Forge platform, loans are pooled into standardized vaults and converted into tokens that can be used as collateral in DeFi protocols. This standardization is essential.
“DeFi only works if the collateral is liquid and transparent,” he said.
Figure has launched related initiatives on networks like Solana, with plans to expand to Ethereum, allowing users to invest in or borrow from tokenized credit pools.
The company is also experimenting beyond lending.
It has introduced a yield-bearing stablecoin, YLDS, backed by traditional assets such as Treasuries, with around $600 million in balances, and is exploring tokenized stocks, issuing its own shares on-chain in a way that allows investors to lend directly against them.
Cagney highlighted a glaring inefficiency in traditional markets. Stock loans can carry borrowing rates of 30% or more, while investors often receive only a fraction of that return.
“We can put that value back into the hands of the asset owner,” he said.
Pragmatic Blockchain
For all his ambition, Cagney does not hesitate to draw boundaries.
Not everything is owned by the chain, he said. Tokenizing property itself, for example, may not be an efficient use of capital. But the financial abstraction, i.e. loans, securities and equity, is another story.
This pragmatism reflects a broader criticism of the crypto industry, which he says has often pursued ideas without a clear economic basis.
“A lot of things were done just for fun,” he said. “What matters is, does it actually improve the system?”
Figure’s growth suggests that, at least in one segment of the market, the answer might be yes. The company is profitable, growing and approaching $30 billion in cumulative creations. This is still small compared to traditional finance, but it is important enough to be noticed.
Cagney said he sees a lot more room to maneuver.
“Blockchain is the most transformative technology, and it will reallocate more public market capitalization than any technology ever has,” he said. “Entire industries will disappear when they become ubiquitous. Someone has to do the work to make it happen, and that’s exactly what we’re doing.”
Read more: Private credit could be tokenization’s game-changing use case: Maple’s Sidney Powell
