(Bloomberg) -- Figure Technologies Inc., a blockchain and lending startup founded by former SoFi Technologies Inc. Chief Executive Officer Mike Cagney, is seeking approval from US regulators to issue an interest-bearing stablecoin. 

The move is a novel attempt at creating a new class of stablecoins with federal legitimacy, and if successful, Figure will be offering the first stablecoin regulated as a security in the US. Figure filed a draft registration statement with the Securities and Exchange Commission in October under the name of Figure Certificate Co., a subsidiary. 

The filing shows that Figure is seeking to register the stablecoin as so-called “face-amount certificates,” a type of fixed-income securities, and will issue it using blockchain technology. If approved, it will be available to both US retail and institutional investors. 

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Figure’s digital asset arm, Figure Markets, is planning to raise $50 million at a valuation of $250 million, excluding the amount raised, with Jump Crypto potentially as a lead investor, according to two people familiar with the matter. The funding will be used to support operations for Figure Markets, one of the people said, who declined to be identified discussing private information.

Both Figure and Jump declined to comment. 

The market of stablecoins  — tokens that are pegged to an asset like the US dollar — is currently dominated by Tether Holdings Ltd.’s USDT, which has $95 billion in circulation, followed by Circle Internet Financial’s USD Coin. Both do not pay interests and are mostly used by crypto traders to settle transactions or move assets between exchanges. 

While multiple interest-bearing stablecoins exist outside of the US, many issuers have chosen not to offer the product in the US over concerns that they would be regulated as securities by the SEC.

Figure expects that its offering will be used as an alternative to existing stablecoins for payments and transaction settlements, the filing shows. Purchasers may be “interested in an instrument that provides yield backed by highly-liquid, investment-grade assets that can be held in a digital format, liquidated on short notice and used in peer-to-peer transactions,” the filing says.

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Unlike most stablecoins that are pegged at $1 each, Figure’s offerings is redeemable at 1 cent per certificate, meaning a $1 payment will require the transfer of 100 certificates. Interest will accrue daily and be paid monthly to the holder, according to the filing.  

The interest will be derived from reserves, which will include treasury, commercial paper, corporate debt, among others, the filing says. Holders will need to complete know-your-customer process to sign up and obtain the stablecoins. 

An approval is far from guaranteed, and the application process is likely to intensify debates on how stablecoins should be regulated in the US. Several attempts by US lawmakers to put forward bills on stablecoins have been unsuccessful, but oversight of the sector has been singled out as a priority by US President Joe Biden. Circle recently filed confidentially its plans to launch an initial public offering, more than a year after scrapping its attempt to go public through a blank-check deal.  

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Figure is also filing to register an offering for investment purposes, called Figure Installment Certificates, which will cater to investors who are interested in earning yields while holding the assets in a “digital format,” the filing shows. 

Figure, which Cagney started in 2018, uses blockchain to build financial products, such as loan origination. Figure’s lending arm LendCo has been working with banks on an initial public offering, Bloomberg reported last November.

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