Figure Co-Founder: $6T Asset-Backed Finance Market Still in Early Stages of On-Chain Adoption

ChainCatcher report: Mike Cagney, co-founder and Executive Chairman of Figure, tweeted that DeFi is better suited for Asset-Backed Finance (ABF), avoiding double pledging, directly improving collateralization, enabling self-custody or autonomous environments, and liquidity staking. He noted that Figure has brought ABF on-chain, but the industry remains in its early stages, with a $6 trillion market yet to undergo large-scale migration. He also listed five reasons why traditional finance has been slow to adopt on-chain applications: poor user interface experiences, which have allowed apps like Robinhood and SoFi to succeed in the retail space; the long-standing difficulty of achieving both qualified custody and recoverable self-custody; hedge funds and similar entities requiring multi-wallet, multi-user, role-based permissions, full audit trails, and export capabilities for fund administration and accounting; regulatory frameworks are gradually being clarified, with precedents for on-chain native securities becoming clearer, with hope pinned on the CLARITY Act and accompanying guidance; and KYC challenges are more solvable than commonly perceived, as on-chain systems enable programmatic screening and wallet-level access controls.