Figure Bypasses DTCC with On-Chain Public Stock

Main Summary

Figure Technology Solutions has launched FGRD, the first SEC-registered common stock issued natively on a public blockchain. This move bypasses the traditional Depository Trust & Clearing Corporation (DTCC) and introduces real-time T+0 settlement, aiming to modernize capital markets and reduce risk.

Market Overview

In an interview with Investing.com, CEO Michael Tannenbaum explained that Figure achieved this innovation by working within existing SEC rules, proving that blockchain can meet current regulatory standards without new legislation. The new infrastructure eliminates the T+2 settlement window, a delay Tannenbaum calls an 'unnecessary holdover from an analog era,' and reduces counterparty risk associated with legacy market makers.

Economic and Market Impact

By removing intermediaries, Figure aims to drastically lower costs and settlement times, similar to its disruption of the mortgage industry. This model provides investors with direct asset ownership and immediate access to funds upon trade execution. The company plans to expand its On-Chain Public Equity Network (OPEN) to attract more corporate issuers and integrate with other blockchains like Ethereum for deeper global liquidity.

Conclusion

Figure's initiative represents a foundational step toward 24/7 global capital markets. The company expects significant institutional adoption over the next 12 to 18 months as the cost savings and efficiencies of bypassing legacy systems become more evident to brokers and issuers.

FAQ

Q: What is T+0 settlement?
A: T+0 settlement means the transfer of securities and funds occurs on the same day a trade is executed, removing the two-day waiting period common in traditional stock markets.

Q: Are assets safe if an investor loses their private key?
A: Yes. The platform functions as a transfer agent, maintaining a recoverable ownership record. Shareholders can recover their assets through a secure identity verification process.

Source: Investing.com