By Bill Alpert

Everyone from BlackRock to the New York Stock Exchange is starting to use blockchain technology to record and trade stocks, bonds, loans, and even real estate.

Investors are betting that Figure Technology Solutions -- a small New York company that has arranged $20 billion in tokenized home-equity loans in just a few years' time and is now offering a blockchain version of its common stock -- can be a catalyst for this change.

Figure's common shares tripled in the months after its September 2025 debut at $25, when its anchor backers included investor Stanley Druckenmiller. The stock eased recently in the crypto collapse but still trades at $36.91 a share and more than 39 times this year's earnings forecast. SoFi Technologies, a comparable consumer-finance financial-technology company, has a 34 times price/earnings ratio.

Figure's leaders tell investors they are building the future of capital markets. "We don't see ourselves as either a lending company or a crypto company," CEO Mike Tannenbaum tells Barron's. "We're transforming capital markets on blockchain rails."

Capital markets firms are embracing blockchain technology for real-world assets because blockchain files -- known as "tokens" -- can record documents and transactions in an immutable form. Tokenized assets can streamline trading, instantly settle transactions, trade round-the-clock, and reduce margin-collateral requirements.

Figure's asset-tokenization campaign will be competing against rivals large and small, from Intercontinental Exchange and Tradeweb Markets to start-ups such as Digital Asset Holdings, Alpaca, and Securitize. If Figure can't move its blockchain foray beyond consumer lending, its lofty earnings multiple may be hard to sustain, even if it continues to grow its home-equity lending business.

Home-equity loans might seem like a modest base for conquering the capital markets, but the loans have proved profitable. Announcing preliminary results for 2025 on Feb. 13, Figure said the year's revenue rose 50% to at least $505 million, with cash operating income of $250 million. It reports full results on Feb. 26.

Founder and Executive Chairman Mike Cagney recounts in his folksy letter prefacing Figure's prospectus that he and his wife, June Ou, tried to pitch banks in 2018 on using blockchain technology to tokenize loans. With documentation included in the token, a loan can be resold or securitized without each buyer having to reverify loans, titles, and liens.

But no bank wanted to be the first adopter, so Figure instead chose the uncrowded market for home-equity lines of credit, commonly called Helocs, to serve as a test bed where it could make loans and demonstrate blockchain's greater efficiency. Figure claims that its digital system allows it to originate loans in a fraction of the usual time, and at a cost of $1,000 per loan, instead of the $12,000 industry average.

Figure now has other lenders originating Helocs on its blockchain system, which earns it fees along with gains on reselling the loans. A secondary trading venue called Figure Connect lets investors like Blue Owl Capital trade the tokenized loans. And to draw more capital into its system, Figure launched a stablecoin, $YLDS, which is registered with the Securities and Exchange Commission and pays a current yield of about 3%.

This all runs on Figure's homegrown blockchain, called Provenance. Figure developed Provenance some years back, when there were few blockchains suited for real world financial assets, says CEO Tannenbaum.

Now there are a number of widely used blockchains in finance, including Ondo, Solana, and Canton, a blockchain used by Goldman Sachs Group, Tradeweb, Broadridge Financial, and Nasdaq.

That has left Provenance in a silo, with few developers outside of Figure building software for it. But Figure's Helocs success means there are currently some $15 billion in active loan assets represented by Provenance tokens. That puts its blockchain in second place behind Canton's $350 billion worth of financial assets on chain, according to data platform RWA.xyz, which tracks tokenized real-world assets.

BofA Securities analyst Craig Siegenthaler put an Underperform rating on Figure in early February, when the shares were going for $52, after concluding that large banks were unlikely to adopt Figure's consumer loan technology. Offerings from Intercontinental Exchange would be more successful, he said.

For Figure to make bigger inroads in capital markets, it will have to go beyond Helocs. Many others are also on the march toward those markets. Dozens of firms and trade groups can be found among the participants and commenters at the SEC's crypto task force.

Among rising blockchain technologists are Canton creator Digital Asset Holdings; Securitize, which is going public in a merger with the Cantor Equity Partners II special-purpose acquisition company; and Superstate, which put shares of the crypto firm Galaxy Digital on the Solana blockchain in September.

Some asset managers also have in-house tokenization teams including WisdomTree and Franklin Templeton.

Figure hopes to again lead by example. On Feb. 13, it launched an offering of shares based on its Provenance blockchain. The shares will trade on Figure's own equity network, where investors can lend them directly to one another, cutting out both the exchanges and prime brokers. Alongside the blockchain share offering, several of Figure's venture backers are selling stock. So, too, are Cagney, Ou, and Tannenbaum.

Pitching Figure's blockchain stock directly to investors, Cagney wrote on X, "You'll be putting your weight behind the first real native blockchain challenge to the centralized equity exchanges. And blockchain Figure affords similar rights and privileges as Nasdaq Figure."

Some of the generous earnings multiple on Figure's share price comes from investors who think the company will succeed in its capital market ambitions. But for Michael Buckley, the equity head at Druckenmiller's Duquesne Family Office, which still owns Figure shares, it will be enough for fintech to continue its growth in Helocs and potentially expand into other personal loans.

"This might be one of the first examples where the blockchain actually provides value and isn't a solution looking for a problem," says Buckley.

Write to Bill Alpert at william.alpert@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

February 18, 2026 11:48 ET (16:48 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.