- Alternative Blockchain lender, Figure Technologies, has applied for a national banking charter with the Office of the Comptroller of the Currency.
- This move highlights the growing maturity of the blockchain sector.
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The US-based alternative lender, which uses blockchain to process home equity loans, has applied for national banking status with the Office of the Comptroller of the Currency (OCC). for Bloomberg. The figure had originally planned in December, immediately after a $ 103 million raise, to offer banking products with the help of partner banks. Launched in 2018, it has originated more than $ 1 billion in home equity lines of credit.
A banking charter would help Figure distribute its expanding suite of blockchain-powered products across the country. Initially, Figure offered a fixed-rate home equity loan product, which allowed clients to borrow against the equity in their homes. The data of a client’s loan application is stored and shared in a blockchain, allowing the startup to approve home equity loans in as little as 5 minuteswhile funding can be released in five days compared to two to four weeks process traditionally required by lenders.
The alternative lender has since expanded the use of blockchain to other products, including a mortgage refinance option and an asset management platform, and plans to launch a small dollar installment loan offering in January. However, these products require licenses in each state in which Figure operates, making them expensive and difficult to expand.
Currently, Figure has to comply with 96 licenses from 49 states to operate its business, which could increase to 200 by next year. for co-founder and CEO Mike Cagney. In contrast, a national banking charter would allow Figure to offer its products nationwide while focusing on the requirements of a single regulator, simplifying its compliance efforts.
We hope that Figure will be successful in obtaining a letter thanks to a fintech-Regulator friendly, and its application underscores the evolution of blockchain players. The OCC has just issued a preliminary and conditional approval for SoFi-other alternative lenderAlthough not a blockchain-based one, which submitted a request for bank authorization in July.
The regulator is also waging a legal battle to demonstrate its authority to launch a specific fintech bank. letter and recently gave national banks the go-ahead to custody crypto. These actions suggest that you will be open to licensing Figure. The Figure app follows other startups looking to bring more blockchain-based financial services products into the mainstream through licensing.
In September, cryptocurrency exchange Kraken received a letter from a state bank in Wyoming to add a digital asset debit card and savings accounts. Y Coinbase is looking to expand its Bitcoin-backed loans to additional states beyond the 17 in which it is currently licensed. We will probably see more blockchain startups seek licenses in the coming months to strengthen its competitiveness.
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