Blockchain-enabled lending firm Figure Technologies is the latest firm in the space to try to become a cryptocurrency bank.
According to a Nov. 6 announcement, Figure Technologies applied for a national bank charter from the Office of the United States Comptroller of the Currency (OCC). The firm’s CEO and co-founder Mike Cagney commented:
“Figure is pursuing the charter to reduce the complexity of our business—we’ll have over 200 state licenses next year without such a charter… By reducing complexity, we can leverage the technology efficiencies we have to deliver financial solutions to traditionally underserved and underrepresented consumers, driving real financial inclusion.”
Figure Technologies explains in its announcement that the national bank charter would allow it to offer the same set of products and services throughout the U.S. Furthermore, the firm’s compliance efforts would have to keep the requirements of only one regulator in mind, reducing costs and risks.
The Head of Lending at Figure, C.D. Davies, will lead the firm’s efforts to obtain the bank charter from the regulator and take the lead as Figure Bank’s CEO. Before working at Figure, he served as the CEO of CitiMortgage and head of global mortgage at Citibank, and as president of home loans at Capital One. He said that he believes a banking charter will allow the firm to fight for financial inclusion:
“This national bank charter will be instrumental in our efforts to continue to develop and deliver new financial products and services to communities across this country that really haven’t had access to affordable offerings.”
Figure Technologies claims in the announcement that its blockchain technology implementation drastically shortens the time it takes to originate a loan. Also the origination, financing, servicing, and capital markets execution costs are significantly reduced compared to traditional solutions.
Furthermore, the firm is also currently developing a point-of-sale financing solution that uses blockchain technology to bring financing to underserved categories of consumers.
Crypto banks: a growing trend
In mid-September the major cryptocurrency exchange Kraken received a bank charter approval in Wyoming, and an increasing number of crypto firms are trying to do the same. Among them is well-known blockchain advocate Caitlin Long, who is in the process of creating digital asset-focus Avanti Bank, also in Wyoming. More interestingly, some traditional financial institutions have started to move into the cryptocurrency space.
As Modern Consensus reported at the end of October, the Swiss subsidiary of Gazprombank—the banking arm of Russian state-owned energy firm Gazprom—received regulatory approval to offer crypto services in Switzerland.