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      Figure Co-Founder Highlights Challenges in Asset-Driven Finance Migration to DeFi

      Mike Cagney, co-founder and Executive Chairman of Figure, emphasized the potential of decentralized finance (DeFi) for asset-backed finance (ABF) in a recent tweet. He noted that DeFi can help mitigate issues such as double pledging and enhance collateral management through self-custody and liquidity collateral. Despite these advantages, Cagney pointed out that the migration of the approximately $60 trillion asset-driven finance market to on-chain applications remains in its early stages.

      Cagney identified several factors contributing to the slow adoption of on-chain applications by traditional finance. He cited the poor user interface experience as a significant barrier, allowing platforms like Robinhood and SoFi to dominate the retail market. Additionally, he mentioned the complexities surrounding qualified custody and the challenges faced by hedge funds, which require multiple wallets and tiered permissions for effective fund administration and accounting.

      Regulatory clarity is also a concern, although Cagney expressed optimism about the potential impact of the CLARITY Act and evolving guidelines for on-chain native securities. He concluded by addressing Know Your Customer (KYC) issues, stating that on-chain programmatic screening and wallet-level permissions could simplify compliance more than is commonly perceived.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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