Figure Technologies, Subscribe to Offer On-ramp for Alternative Fund Managers
New product to enable the institutional market to add digitally native fund offerings alongside their existing product ranges.
Charlotte NC, home of Figure Technologies; Source: Shutterstock
key takeaways
- Partnership will help “accelerate the move to decentralized, instantaneous and bilateral settlement,” Figure CEO Mike Cagney says
- Alliance to offer alternative fund managers an institutional-grade on-ramp
A fintech company using blockchain technology to empower decentralized finance has partnered with a software solution to allow the institutional market to add digitally native fund offerings alongside their existing product ranges.
Figure Technologies and Subscribe are teaming up to launch the Subscribe Passport, a smart subscription platform and universal investor identity that allows private funds to quickly issue digital interests to their limited partners on Provenance, the blockchain Figure helped develop based on the Cosmos SDK.
The technology is designed for use across multiple asset classes and markets. The company was founded in 2018 by Mike Cagney, who also founded SoFi and served as its CEO.
Subscribe’s electronic subscription document technology is used by more than 5,000 institutional investors, 1,200 fund managers, and over 300 service providers, according to the firm, such as fund formation law firms, fund administrators and asset custodians.
Subscribe’s universal investor profile can be used to fill out any subscription agreement globally with the press of a button. The Subscribe Passport will allow investors to use that profile in the context of digitally native funds to transact from a digital wallet in a regulatory-compliant fashion.
Figure’s alliance with Subscribe is about enabling the institutional market to add digitally native fund offerings alongside their existing product ranges, Figure CEO Mike Cagney told Blockworks. As part of the partnership, Figure will make a strategic investment in the company.
The private funds industry has only recently begun to move from analog to digital, he noted, adding that the shift has improved the investor experience and expanded access.
“We want to accelerate the move to decentralized, instantaneous and bilateral settlement of these historically heavily intermediated assets,” Cagney said.
“Truly digitally native funds will enable new ways for investors to interact with these assets, including bilateral secondary trading and new forms of collateral management.”
In addition to continuing its lending services, Cagney said, Figure recently helped New York Community Bank (NYCB) launch USDForward (USDF), which they call a digital marker. Like a centralized stablecoin such as Gemini’s GUSD, USDF represents bank deposit liabilities; but unlike other stablecoins, it is only transferable between wallets that undergo “a strict, bank-endorsed KYC/AML review process.” The intention is that it be used solely to support marketplace transactions on Provenance, so it will not interoperate with the broader Cosmos ecosystem through IBC.
Provenance is an example of how blockchain technology can disrupt financial services, Subscribe CEO Rafay Farooqui said in a statement.
“While most firms are stuck in the exploratory phase, the blockchain-based infrastructure behind DeFi is maturing at an accelerating rate,” he noted. “Together, Subscribe and Figure are moving the ball forward for the largest alternative fund managers with our institutional-grade on ramp to the future of financial services.”
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