Coinspeaker Figure Technologies Pursuing Approval for Interest-Bearing Stablecoins
Stablecoins occupy a very unique place in the crypto industry. On the one hand, they offer a lot of the benefits of crypto like decentralized access for users and faster transaction speeds. On the other hand, they are pegged to ‘traditional’ assets, which makes them less volatile than other tokens. Stablecoins have been quite popular over the years but are about to possibly be given a new spin, thanks to Figure Technologies. The lending company has filed with the SEC to launch an interest-bearing stablecoin.
Details About the Filing
The idea of a crypto-earning interest is not a new phenomenon. Tokens based on the proof-of-stake consensus can be staked for interest and this is done all the time. What makes this filing unique is that if it gets approved, it will be the first stablecoin to be regulated as a security in the United States.
A look at the filing shows that Figure Technologies plans to release these assets as “face-amount certificates”, which is a form of fixed-income security. All this, of course, will be based on blockchain technology. It is worth noting that interest-bearing stablecoins have had a presence outside of the United States already. But given the contentious relationship that the SEC has had with the crypto sector, it hasn’t yet taken off in the States.
The SEC infamously sued several crypto companies including Binance and Coinbase for what it called the selling of unregistered securities. This is besides the lawsuits it has had with both Telegram and Ripple Labs about the same issue. The bone of contention seems to be whether or not crypto assets are securities and to what degree. With this history of lawsuits, many companies likely felt that an interest-bearing stablecoin would not be worth the hassle.
But Figure Technologies is taking the leap and trying to offer an alternative to the dominant stablecoins in the market like USDT. As per the filing, the token will be redeemable for 1 cent each, with the interest accruing daily and being paid each month. Then there is the matter of its reserves, which has been a major issue for stablecoins, with Tether facing accusations of lying about its reserves for years.
Figure Technologies has been open about its plans, noting that its reserves will have assets like treasury securities and commercial paper. Those wishing to buy the token will also have to complete various know-your-customer processes.
While we will have to wait a while to see if this application will be approved, it will likely bring up the discussion once again about the legal status of cryptos. Some believe all cryptos, stablecoins included, to be securities, while others disagree. And if it is approved, we might see many more interest-bearing stablecoins popping up soon.
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Figure Technologies Pursuing Approval for Interest-Bearing Stablecoins