Figure CEO interview: Bypassing the DTCC to modernize capital markets By Investing.com

Figure (NASDAQ:FIGR) launched FGRD, the first SEC-registered common stock issued natively on a public blockchain, enabling T+0 settlement versus the legacy T+2 standard and eliminating a two-day settlement window. The company claims prior operational efficiencies (mortgage closings cut from 45 to 5 days and costs from ~$12,000 to ~$1,000) and offers recoverable on-chain ownership via its transfer agent function. Management expects meaningful institutional integrations and multi-chain expansion over the next 12–18 months, positioning OPEN to remove DTCC/transfer-agent fees and accelerate a move toward near real-time global markets.

Analysis

This development redistributes revenue pools across the capital-markets stack: exchanges and market-data providers gain optionality to capture connectivity and 24/7 execution fees, while legacy intermediaries that monetize settlement float and transfer-agent fees face margin compression. Infrastructure demand shifts too — validators, custody tooling, and low-latency connectivity will create new pockets of premium spending (compute, signers, KYC/AML rails) that incumbents with hardware and hosting exposure can monetize.

Adoption is a multi-stage process with asymmetric near-term and long-term risks. Near term (weeks–months) the primary catalysts are proof points: additional issuer announcements, announced integrations by tier-1 brokers, and partner listings on major ATSs; a failure to produce these will stall momentum. Over the next 12–36 months the two main tail risks are (1) governance or cyber incidents that reset confidence in self-custody/recovery workflows, and (2) regulatory intervention or a DTCC-led interoperable alternative that preserves incumbents’ economics. Either could reverse investor enthusiasm rapidly and fragment liquidity across chains and venues.

From a market-structure perspective, market makers’ economics are at risk as settlement float and intraday funding opportunities shrink; that suggests higher transaction-cost capture for exchanges and custody/security software vendors but pressure on securities-lending and prime-broker P&L. The consensus sees modernization as a pure efficiency win — the contrarian read is that the industry will bifurcate into high-liquidity on-chain pools for a subset of issuers and fragmented, higher-cost off-chain markets for everything else, prolonging incumbents’ revenue streams while selectively creating winners among infrastructure specialists.

Key Decisions for Investors

• Speculative long FIGR (small position ≤1–2% NAV): buy FIGR common or Jan 2027 LEAP calls (2–4x delta) as a binary bet on broader issuer adoption; size to a capped loss of premium with target 3x upside if multiple tier‑1 issuers follow in 12–24 months.
• Medium conviction long NDAQ (3–5% NAV or buy Jan 2026 calls): thesis is capture of incremental connectivity and market-data fees as venues expand hours and link to on‑chain ATSs; time horizon 6–18 months, stop-loss at 10–15% to protect against regulatory backlash that delays trading changes.
• Thematic long SMCI (or long-dated calls, 12–24 months): play increased demand for on-prem hardware and co‑location from validators/custodians; target 2x upside if institutional integrations accelerate, hedge with a 30–40% collar to limit downside from cyclical weakness.
• Hedge/short idea: short HON-sized hedge (1–3% NAV) or buy inexpensive puts as a macro rotation hedge: if the market re-rates legacy industrial/service providers due to fee compression and capital shifts to fintech infrastructure, HON and similar incumbents could underperform over 6–18 months.
• Pair trade: long NDAQ / short HON (equal notional, 6–12 month horizon) to express structural capture of new market-data/connectivity revenue vs incumbents exposed to transfer-agent/maintenance fee erosion; expect asymmetric payoff if regulatory clarity arrives favoring on‑chain issuance.