Exploring Real World Assets and Private Credit on the Blockchain with Figure Technologies

The financial world is changing fast, and one of the most exciting developments is the use of blockchain technology to handle real world assets and private credit. Figure Technologies is a newcomer making waves in this space by bringing traditional finance onto the blockchain. This post explores how Figure is transforming lending and asset management, what challenges they face, and what this means for investors and borrowers.

Figure Technologies' blockchain infrastructure powering real world asset transactions

What Are Real World Assets on the Blockchain?

Real world assets (RWAs) include physical or financial assets like real estate, loans, or private credit that exist outside the digital world. Traditionally, these assets are managed through paper contracts, banks, and intermediaries. Moving RWAs onto the blockchain means representing these assets as digital tokens or smart contracts that can be traded, tracked, and managed transparently and efficiently.

This shift offers several benefits:

• Increased transparency: Every transaction is recorded on a public or permissioned ledger, reducing fraud risk.

  
  

• Faster settlement: Blockchain can cut down the time it takes to transfer ownership or settle loans.

  
  

• Lower costs: Removing middlemen reduces fees and administrative overhead.

  
  

• Broader access: Investors worldwide can participate in markets that were once limited by geography or regulation.

  
  

Figure Technologies focuses on tokenizing private credit and other real world assets to unlock liquidity and create new investment opportunities.

How Figure Technologies Uses Blockchain for Private Credit

Private credit refers to loans made outside public markets, often to small businesses or individuals. These loans are usually illiquid and hard to trade. Figure uses blockchain to digitize these loans, creating tokens that represent ownership or claims on the loan payments.

Here is how Figure’s process works:

1. Origination: Figure partners with lenders or originates loans directly.

   
   

2. Tokenization: Each loan is converted into a digital token on the blockchain.

   
   

1. Distribution: Tokens are sold to investors, allowing them to buy fractions of loans.

   
   

2. Servicing: Loan payments and interest are tracked transparently on the blockchain.

   
   

1. Secondary Market: Investors can trade tokens, providing liquidity that traditional private credit lacks.

   
   

This approach benefits borrowers by potentially lowering borrowing costs and speeding up funding. Investors gain access to a new asset class with transparent performance data and the ability to trade their holdings.

Challenges in Bringing Real World Assets to Blockchain

While the promise is clear, several challenges remain:

• Regulatory compliance: Financial assets are heavily regulated. Figure must ensure tokenized loans comply with securities laws and lending regulations.

  
  

• Legal recognition: Courts and regulators need to accept blockchain records as valid proof of ownership.

  
  

• Data privacy: Balancing transparency with borrower confidentiality requires careful design.

  
  

• Technology adoption: Traditional lenders and investors may hesitate to adopt new systems.

  
  

Figure addresses these by working closely with regulators, using permissioned blockchains where needed, and building user-friendly platforms that integrate with existing financial systems.

Tokenized private credit transactions displayed on a blockchain ledger

Real Examples of Figure’s Impact

Figure Technologies has already launched several products that showcase the potential of blockchain for real world assets:

• Home equity lines of credit (HELOCs): Figure offers HELOCs that are originated and managed on the blockchain, reducing paperwork and approval times.

  
  

• Loan refinancing: Borrowers can refinance existing loans faster with transparent pricing and automated processes.

  
  

• Investment products: Figure’s platform allows investors to buy tokens backed by pools of loans, diversifying risk and improving liquidity.

  
  

For example, a borrower seeking a HELOC can apply online, receive approval within days, and have the loan recorded on the blockchain. Investors buying tokens backed by these loans receive regular payments and can trade their tokens on secondary markets.

What This Means for the Future of Finance

Figure Technologies is part of a broader trend to bring traditional finance onto blockchain platforms. This could reshape lending, investing, and asset management by making them more efficient, transparent, and accessible.

Some potential future developments include:

• More asset types tokenized: Beyond loans, assets like real estate, art, or royalties could be digitized.

  
  

• Global investor access: Cross-border investment in private credit and real assets may become easier.

  
  

• Automated compliance: Smart contracts could enforce regulatory rules automatically.

  
  

• Improved risk management: Real-time data on asset performance could help investors make better decisions.

  
  

These changes could lower costs for borrowers, open new markets for investors, and create a more inclusive financial system.

Digital marketplace for trading tokenized real world assets on blockchain

Final Thoughts

Figure Technologies shows how blockchain can unlock value in real world assets and private credit. By digitizing loans and creating transparent, tradable tokens, they offer new opportunities for borrowers and investors alike. While challenges remain, the progress so far points to a future where finance is faster, clearer, and more accessible.

For anyone interested in the future of lending or investing, watching how Figure and similar companies evolve is essential. Exploring blockchain’s role in real world assets could open doors to new financial products and markets that were once out of reach.