Blockchain as Wall Street’s New Plumbing

by

Finance

What to know:

  • The ledger murmurs a miracle: over $1 billion in monthly loan originations in March for the first time, a gleaming tokenized gospel validating the marketplace that peddles credit in a language of digits and dreams.
  • CEO Mike Cagney insists the blockchain is a blunt instrument to prune the forest of intermediaries across securitization, lending and stock borrowing, leaving behind only the gears and a sly wink.
  • New contraptions, from DeFi credit vaults to tokenized equities, aspire to democratize access to yield, as if the gods of finance suddenly remembered the common man’s coffee cup.

Mike Cagney has trodden these corridors before, but never with blockchain buzzing in the air like a swarm of suspicious bees.

In the dawn of the previous decade, he helped reshape consumer lending with SoFi by braiding borrowers directly to capital. Now, at Figure Technology Solutions (FIGR), he proclaims he aims to rebuild the scaffolding of credit markets themselves-on a stage grander than a theatre and with fewer confessions, a prospect both heroic and mildly comic.

The plan seems to have a pulse. Figure surpassed $1 billion in monthly loan originations for March, part of a $2.9 billion first quarter that nudges the firm toward roughly $12 billion in annualized volume-enough to catch the gaze of the moonlit capital gods.

Cagney, who will address Consensus Miami next week, told CoinDesk that the ambition is to craft new plumbing for these markets.

“We’re building a marketplace where credit can move efficiently, without all the traditional layers,” he said, with the air of a conjurer announcing a trick that will save you from paying the goblin tolls.

Three levers of value

Cagney divides Figure’s model into three stubborn pillars.

The first is cost. Tokenizing loans reduces the friction and expense of securitization, excising intermediaries who have historically skimmed fat from the ledger like shopkeepers at a carnival.

The second is liquidity. Figure has built what it describes as one of the few continuously updating marketplaces for consumer credit outside of government-backed mortgage systems like Fannie Mae and Freddie Mac, a sort of restless marketplace that never tires and never washes its hands.

“The loans update in real time, which creates a different kind of market,” Cagney said, as if revealing that reality itself has finally learned to sprint.

The third is access. By bringing these assets on-chain, Figure can plug them into decentralized finance (DeFi), allowing a broader range of investors to gain exposure, or borrow against them.

That’s where the model begins to blur the line between traditional finance and crypto, Cagney said, like a magician admitting the rabbit is a very persistent idea.

Figure’s latest push is into what Cagney calls “democratized prime,” essentially opening up prime brokerage-style lending to a wider audience, because why should only princes taste the sweet pepper of leverage?

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. That standardization is the keystone.

“DeFi only works if the collateral is liquid and transparent,” he said, as if repeating a blessing he hopes will be heard by auditors everywhere.

Figure has launched related initiatives on networks like Solana, with plans to expand to Ethereum, allowing users to invest in tokenized credit pools or borrow against them, like borrowers borrowing from a chorus of tokens that sing only when you read the fine print aloud.

The company is also experimenting beyond loans.

It has introduced a yield-bearing stablecoin, YLDS, backed by traditional assets like Treasurys, with roughly $600 million in balances, and is exploring tokenized equities, issuing its own stock on-chain in a way that allows investors to lend against it directly, because every dream needs a little margin debt slapped on its back like a playful imp.

Cagney pointed to a stark inefficiency in traditional markets. Stock lending can carry borrow rates of 30% or more, while investors often receive only a fraction of that yield.

“We can put that value back in the hands of the asset owner,” he said, with a flourish that suggests the universe owes the holder a debt repaid in digits.

Pragmatic blockchain

For all the ambition, Cagney is quick to draw boundaries, as any respectable satirist would demand.

Not everything belongs on-chain, he said. Tokenizing property itself, for instance, may not be an efficient use of capital. But financial abstraction-loans, securities and equity-are a different, more forgiving story, like a misbehaving violin that finally finds the right bow.

That pragmatism reflects a broader critique of the crypto industry, which he says has often chased ideas without clear economic grounding, as if chasing shadows in a gas-lit alley.

“A lot of things were done just for the sake of it,” he said. “What matters is, does this actually improve the system?”

Figure’s growth suggests, at least in one corner of the market, the answer may be yes. The company is profitable, scaling, and approaching $30 billion in cumulative originations. That’s still a drop in the ocean of traditional finance, but it is a drop that makes the sea watchful.

Cagney said he sees much more room to run.

“Blockchain is the most transformative technology, and it will reallocate more public market cap than any technology ever has,” he said. “There are whole industries that are going to disappear when it becomes ubiquitous. Someone has to do the work to get there, and that’s exactly what we’re doing.”

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2026-05-03 16:03