Figure's On-Chain Public Equity Network Aims to Issue Stocks Directly on Blockchain, Not as Tokenized Replicas

In a move that challenges the conventional model of tokenized securities, Figure Technology Solutions has announced the On-Chain Public Equity Network (OPEN). This platform is designed to handle the entire lifecycle of public company stocks—issuance, trading, and lending—directly on a blockchain, rather than creating tokenized replicas of off-chain assets.

The distinction is critical. Most blockchain-based equity projects today tokenize existing shares, creating a digital representation that still relies on traditional settlement systems. OPEN proposes a different architecture where equity is issued natively on the blockchain from the outset. This could potentially reduce settlement times from days to minutes, eliminate certain intermediaries, and create a more programmable form of ownership.

Figure, founded in 2018 by former SoFi CEO Mike Cagney, has built its reputation on blockchain-based lending. The company has originated over $10 billion in loans using its Provenance blockchain, according to its website. The OPEN platform represents a significant expansion of its vision, moving beyond lending into the broader capital markets infrastructure.

The technical approach matters here. Traditional stock trading operates through a complex chain of brokers, clearinghouses, and custodians, with settlement typically taking two business days (T+2). Tokenized securities aim to speed this up but often still require off-chain reconciliation. A native on-chain equity system would need to address key regulatory and technical challenges:

1. Regulatory compliance: How does the platform handle SEC regulations, investor accreditation, and disclosure requirements?
2. Custody and key management: Who holds the private keys for institutional investors, and how is this secured?
3. Market structure: How does it integrate with existing exchanges, or does it create a new trading venue?
4. Scalability: Can the underlying blockchain handle the volume and speed of public market trading?

Figure's Provenance blockchain uses a proof-of-stake consensus mechanism and is designed for financial services applications. The company claims it can process thousands of transactions per second with sub-second finality. For public equities, which trade millions of shares daily, this would need to be proven at scale.

The lending component is where Figure's existing expertise becomes relevant. Stock lending—where investors borrow shares to short sell—is a multi-billion dollar market. On-chain lending could potentially automate collateral management and reduce counterparty risk through smart contracts. However, it also raises questions about how traditional stock loan agreements, which are often bespoke and negotiated, would be standardized on-chain.

Industry observers note that while the concept is ambitious, execution will depend on several factors:

• Institutional adoption: Will major broker-dealers and asset managers adopt this infrastructure?
• Regulatory approval: The SEC has been cautious about blockchain-based securities, though recent guidance has provided more clarity.
• Interoperability: How will OPEN interact with existing market infrastructure like DTCC or traditional exchanges?

Figure has not yet announced specific launch dates or partnerships for OPEN. The company's existing Provenance blockchain is already used by several financial institutions for loan origination and servicing, which could provide a foundation for expanding into equity markets.

The broader context is significant. The tokenized securities market has grown to over $10 billion in value, according to industry trackers, but most of this represents private assets or funds rather than public equities. OPEN's approach—if successful—could represent a fundamental shift in how public company ownership is recorded and transferred.

For investors and companies considering this model, the key questions will revolve around liquidity, regulatory certainty, and integration with existing financial systems. The promise of faster settlement and reduced costs is compelling, but the practical implementation will require navigating complex regulatory landscapes and building trust with traditional market participants.

Figure's track record in blockchain-based lending suggests they understand the operational challenges, but public equities represent a different scale and regulatory complexity. The company's ability to attract major issuers and institutional investors will be the true test of OPEN's viability.

As the platform develops, watch for announcements about pilot programs, regulatory approvals, and partnerships with established financial institutions. The success of OPEN could signal whether blockchain technology can truly transform public equity markets or remain confined to niche applications and tokenized representations of traditional assets.

For more information about Figure's existing blockchain infrastructure, visit their Provenance blockchain page and their technology solutions overview.