Mike

Provenance Blockchain

Founder

Prime

Street Credit

<p><strong>Figure founder Mike Cagney argues that blockchain-native equities could fundamentally reshape Wall Street credit infrastructure, not by extending trading hours, but by turning publicly traded shares into programmable collateral inside a decentralized lending stack. The claim, laid out in a February 2026 interview, is backed by Figure's own track record of moving more than $20 billion in loans onto public blockchain rails.</strong></p>
<h2 id="what-mike-cagney-actually-means-by-on-chain-equities">What Mike Cagney Actually Means by On-Chain Equities</h2>
<p>In a <a href="https://www.rebank.cc/on-chain-equities-and-the-evolution-of-market-infrastructure-with-mike-cagney-of-figure/" rel="noopener noreferrer nofollow">February 17, 2026 interview published by Rebank</a>, Cagney said the real value of on-chain equities lies in decentralized finance functionality, not simply in offering 24/7 trading windows. The distinction matters because most public commentary about tokenized stocks focuses on extended hours as the headline benefit.</p>
<p>Cagney's thesis is more specific. Blockchain-native equities would let investors use shares as collateral, cross-collateralize equity positions with assets like Bitcoin, and move stock lending into a transparent on-chain marketplace. Each of those functions currently sits inside prime brokerages that charge institutional clients for access.</p>
<h3 id="extended-trading-is-not-the-point">Extended Trading Is Not the Point</h3>
<p>Round-the-clock trading gets attention because it is easy to understand. Cagney's argument is that credit functionality, not clock extension, is the structural upgrade. If equity shares exist as blockchain-native tokens, they become composable inside lending protocols the same way stablecoins and crypto-native assets already are.</p>
<p>This is a forward-looking infrastructure thesis, not a completed market outcome. No tokenized public equity network has yet achieved the liquidity depth or regulatory clarity needed to compete with incumbent prime brokers at institutional scale.</p>
<h3 id="new-credit-functionality-over-convenience">New Credit Functionality Over Convenience</h3>
<p>The credit-market framing separates Cagney's position from the broader tokenization narrative. Where most tokenization pitches emphasize settlement speed or fractional ownership, Cagney is describing a collateral layer, one where a share of stock can simultaneously secure a loan, participate in a lending pool, and sit alongside <a rel="noopener noreferrer nofollow">Bitcoin reserves</a> in a cross-margined portfolio.</p>
<h2 id="how-open-and-democratized-prime-aim-to-move-prime-brokerage-on-chain">How OPEN and Democratized Prime Aim to Move Prime Brokerage On-Chain</h2>
<p>Figure launched its On-Chain Public Equity Network, known as OPEN, on January 14, 2026. The <a href="https://investors.figure.com/news-releases/news-release-details/figure-announces-chain-public-equity-network-open-running" rel="noopener noreferrer nofollow">company's announcement</a> said shareholders would be able to borrow against and lend out their stock through a protocol called Democratized Prime, explicitly targeting functions that traditional prime brokers handle today.</p>
<h3 id="stock-as-programmable-collateral">Stock as Programmable Collateral</h3>
<p>Under the OPEN design, equity shares recorded on the Provenance Blockchain become usable inside lending protocols. A shareholder could post tokenized stock as collateral to borrow cash or stablecoins without selling the underlying position. This mirrors how crypto-native assets already function in DeFi lending markets.</p>
<p>The mechanism is straightforward in concept but untested at Wall Street scale. Traditional prime brokers bundle custody, margin lending, stock lending, and clearing into a single relationship. Democratized Prime attempts to unbundle those functions into transparent, protocol-driven alternatives.</p>
<h3 id="on-chain-stock-lending-vs-traditional-prime-brokers">On-Chain Stock Lending vs. Traditional Prime Brokers</h3>
<p>Stock lending is one of the most profitable lines of business for prime brokers. Borrowers pay fees to access shares for short selling or hedging, and the terms are negotiated bilaterally with limited price transparency. Cagney said the benefits of moving this activity on-chain should push companies and investors toward OPEN.</p>
<blockquote>
 <p>"The significant benefits over the centralized incumbent model incent companies to use OPEN and their investors to demand it."</p>
 <p>— Mike Cagney, Figure Executive Chairman, via Figure investor relations</p>
</blockquote>
<p>An on-chain stock lending market would make borrow rates, availability, and counterparty identity visible to all participants. That transparency could compress fees, but it also raises questions about whether institutional borrowers would accept the reduced privacy.</p>
<h2 id="why-figure-thinks-blockchain-could-rewire-wall-street-credit-rails">Why Figure Thinks Blockchain Could Rewire Wall Street Credit Rails</h2>
<p>The core of Cagney's argument is balance-sheet efficiency. If tokenized equities function as collateral inside DeFi protocols, institutional investors could manage margin, hedging, and borrowing from a single on-chain position rather than across fragmented prime brokerage accounts.</p>
<h3 id="collateral-mobility-and-cross-margin-benefits">Collateral Mobility and Cross-Margin Benefits</h3>
<p>Cagney specifically cited cross-collateralization with Bitcoin as an example of what blockchain-native equities enable. An investor holding both tokenized stock and BTC could use both assets to back a single credit position, something that requires complex bilateral agreements in the traditional system.</p>
<p>With <a rel="noopener noreferrer nofollow">Bitcoin trading near $78,748</a> and institutional allocations growing, cross-collateralization between crypto and traditional equities could appeal to funds that hold both asset classes. The practical challenge is that regulatory frameworks do not yet accommodate this kind of unified margin treatment.</p>
<h3 id="institutional-credit-infrastructure-not-retail-convenience">Institutional Credit Infrastructure, Not Retail Convenience</h3>
<p>The distinction between Cagney's thesis and typical crypto enthusiasm is audience. He is describing infrastructure for institutions that already use prime brokers, not a retail trading app. The target users are hedge funds, asset managers, and market makers who pay billions annually for custody, margin, and lending services.</p>
<p>Moving those services onto transparent, protocol-driven rails could reduce costs. But incumbent prime brokers also provide regulatory cover, counterparty risk management, and balance-sheet support that no DeFi protocol has replicated at comparable scale.</p>
<h2 id="what-figure-has-already-proven-on-chain-and-what-still-needs-approval">What Figure Has Already Proven On-Chain and What Still Needs Approval</h2>
<h3 id="operating-metrics-that-back-the-thesis">Operating Metrics That Back the Thesis</h3>
<p>Figure is not pitching a greenfield concept. The company said it had already originated over $20 billion in loans on public blockchain before launching OPEN in January 2026.</p>
<figure>
 <div>
  Loans originated on public blockchain
 </div>
 <div>
  Over $20B
 </div>
 <figcaption>
  Figure said it had already originated more than $20 billion in loans on public blockchain before launching OPEN.
 </figcaption>
</figure>
<p>By the end of 2025, cumulative originations had reached <a href="https://investors.figure.com/news-releases/news-release-details/figure-technology-solutions-reports-strong-fourth-quarter-2025" rel="noopener noreferrer nofollow">over $22 billion</a>, with the company's lending and securitization infrastructure spanning hundreds of partners across its network.</p>
<figure>
 <div>
  Active partners at year-end 2025
 </div>
 <div>
  307
 </div>
 <figcaption>
  Figure reported 307 active partners at the end of 2025, supporting the claim that its blockchain lending infrastructure already has meaningful network reach.
 </figcaption>
</figure>
<p>Figure's blockchain-verified immutable ledger now supports securitization activity across more than <a href="https://www.housingwire.com/articles/figure-ceo-blockchain-ai-mortgages/" rel="noopener noreferrer nofollow">300 lending partners</a>. In March 2026, the company originated nearly $1.2 billion, its largest month on record, according to CEO Michael Tannenbaum.</p>
<blockquote>
 <p>"You can't AI your way into Triple A [securitization ratings]."</p>
 <p>— Michael Tannenbaum, Figure CEO, via HousingWire</p>
</blockquote>
<p>The comment underscores Figure's argument that blockchain infrastructure, not artificial intelligence alone, is what makes credit assets auditable and rateable at institutional grade.</p>
<p>Figure is also expanding the asset classes running through its tokenized credit marketplace. In April 2026, <a href="https://cointelegraph.com/news/figure-hastra-expand-tokenized-credit-auto-loans" rel="noopener noreferrer nofollow">Cointelegraph reported</a> that Figure and Hastra are adding auto loans to Democratized Prime, extending beyond home equity into a second major consumer credit vertical.</p>
<h3 id="regulatory-bottlenecks-that-could-slow-adoption">Regulatory Bottlenecks That Could Slow Adoption</h3>
<p>Cagney told Rebank that institutions need crypto market-structure rules codified in law rather than subject to shifting political interpretation. He specifically named the GENIUS Act and the CLARITY Act as legislation that would give institutional participants the legal certainty required to move real balance-sheet activity on-chain.</p>
<p>Figure is attempting to fit tokenized equities into existing U.S. market structure through its alternative trading system and a previously filed public registration statement for OPEN-linked equity. Until those regulatory pathways are confirmed, the gap between Figure's proven lending infrastructure and its <a rel="noopener noreferrer nofollow">tokenized asset ambitions</a> remains wide.</p>
<p>The distinction matters: Figure has demonstrated it can originate and securitize billions in home equity loans on blockchain. Whether the same infrastructure can support public equity trading, lending, and cross-collateralization at Wall Street scale is an untested proposition that depends on regulatory outcomes still pending in Congress.</p>
<h2 id="what-could-validate-or-slow-figure-s-wall-street-blockchain-thesis">What Could Validate or Slow Figure's Wall Street Blockchain Thesis</h2>
<h3 id="what-milestones-would-confirm-the-thesis-is-working">What milestones would confirm the thesis is working?</h3>
<p>Passage of the GENIUS Act or CLARITY Act would give institutional participants a codified legal framework for on-chain securities activity. Beyond legislation, the first major public company listing or secondary offering through OPEN would be a concrete adoption signal. Figure's auto-loan expansion with Hastra is a nearer-term test of whether Democratized Prime can scale across asset classes.</p>
<h3 id="what-could-slow-it-down">What could slow it down?</h3>
<p>Regulatory delay is the most obvious risk. If Congress fails to pass market-structure legislation, institutions are unlikely to move significant balance-sheet activity onto blockchain rails regardless of the cost savings. Incumbent prime brokers also have strong incentive to defend their position by matching some of the transparency and efficiency gains that on-chain alternatives promise.</p>
<h3 id="how-do-tokenized-equities-differ-from-existing-brokerage-rails">How do tokenized equities differ from existing brokerage rails?</h3>
<p>Traditional equities settle through centralized clearinghouses and custodians, with ownership recorded in a chain of nominee accounts. Tokenized equities record ownership directly on a public blockchain, making the shares programmable. That programmability is what enables collateral posting, cross-margin, and stock lending without a prime broker intermediary.</p>
<h3 id="what-are-institutional-players-watching-next">What are institutional players watching next?</h3>
<p>The immediate catalysts are the legislative timeline for the GENIUS and CLARITY Acts, Figure's OPEN adoption metrics once tokenized equity trading goes live, and whether Democratized Prime's auto-loan expansion with Hastra produces meaningful origination volume. Each milestone tests a different layer of Cagney's thesis: legal framework, equity-market adoption, and multi-asset credit scalability.</p>
<p>Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.</p>
<p>The post <a href="https://coincu.com/?p=401477" rel="noopener noreferrer nofollow">Figure Founder Sees Blockchain Rewiring Wall Street Credit</a> was initially published on <a href="https://coincu.com/" rel="noopener noreferrer nofollow">Coincu</a>.</p>

Figure Founder Sees Blockchain Rewiring Wall Street Credit

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