Figure Co-Founder Claims $60 Trillion Asset-Driven Finance Is Hard to Onboard

Mike Cagney, co-founder and executive chairman of Figure, stated that DeFi is more suitable for Asset-Backed Finance (ABF), as it can avoid double pledging, improve collateralization, self-custody, and liquidity collateral. Although Figure has brought ABF on-chain, the overall market is still in its early stages, with approximately $60 trillion yet to be migrated on a large scale. Cagney outlined five reasons why traditional finance has not transitioned to on-chain applications: poor user interface experience, which has allowed applications like Robinhood and SoFi to excel in the retail sector; the difficulty of achieving qualified custody and recoverable self-custody; hedge funds requiring multiple wallets, multiple users, tiered permissions, and complete audits; regulatory frameworks are being clarified, with clearer precedents for on-chain native securities, and anticipation for the CLARITY Act and guidelines; and KYC issues can be better addressed through programmatic screening and wallet-level permissions.

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