In a landmark move for financial technology, Figure Technology Solutions has officially launched its OPEN network, a pioneering platform designed to facilitate the on-chain trading of public stocks. This development represents a significant step toward merging traditional equity markets with blockchain infrastructure. Consequently, the financial industry now faces a potential paradigm shift in how securities are issued, settled, and traded globally.
Understanding the OPEN Network for On-Chain Stock Trading
Figure Technology Solutions, founded by former SoFi CEO Mike Cagney, has built the OPEN network on its proprietary Provenance blockchain. Fundamentally, the network enables the creation and exchange of tokenized stocks. These digital tokens are directly backed by real-world shares held in custody. Therefore, companies can issue digital securities on-chain that represent their physical stock. Investors can then trade these tokenized assets directly on the blockchain network. This process promises several key advantages over traditional systems.
- •Enhanced Settlement Speed: Transactions can settle in minutes or seconds, not days (T+2).
- •Reduced Counterparty Risk: The blockchain acts as a single, immutable source of truth.
- •Operational Efficiency: It automates many manual back-office processes like reconciliation.
- •Increased Accessibility: It potentially opens markets to a broader range of participants and enables fractional ownership more seamlessly.
Moreover, the Provenance blockchain itself is a permissioned, proof-of-stake network focused specifically on financial applications. It already supports over $10 billion in transaction value, primarily for loan origination and fund administration. The OPEN network leverages this established, regulatory-aware foundation.
The Broader Context of Tokenized Securities
The launch of OPEN does not occur in a vacuum. Instead, it enters a financial landscape increasingly exploring asset tokenization. Major institutions like JPMorgan, BlackRock, and Franklin Templeton have all initiated their own blockchain-based projects for traditional assets. For instance, the Monetary Authority of Singapore’s Project Guardian has tested tokenized bonds and deposits. Similarly, the European Investment Bank has issued digital bonds on private blockchains. However, Figure’s approach specifically targets publicly traded equities, a massive and highly regulated market.
| Initiative | Lead Organization | Asset Focus | Status (2025) |
|---|---|---|---|
| OPEN Network | Figure Technology Solutions | Public Stocks | Launched |
| Onyx Digital Assets | JPMorgan | Bonds, Repos | Live Pilots |
| BUIDL | BlackRock | U.S. Treasury Tokens | Live Fund |
| Project Guardian | MAS (Singapore) | Wealth Management, Fixed Income | Ongoing Pilots |
This trend is driven by a clear industry recognition of blockchain’s potential to reduce friction. Legacy systems for clearing and settling stock trades, often decades old, involve numerous intermediaries. Each intermediary adds cost, time, and complexity. Blockchain technology, by contrast, can create a unified ledger shared among permitted participants. This shared ledger theoretically eliminates the need for constant reconciliation between disparate systems.
Regulatory Hurdles and the Path to Adoption
Despite the technological promise, the primary challenge for on-chain stock trading remains regulatory compliance. Public securities markets are governed by strict rules from bodies like the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). Any new trading system must ensure compliance with regulations concerning:
- •Investor protection and anti-fraud measures
- •Market manipulation surveillance (e.g., Reg M, Reg SHO)
- •Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements
- •Transparency and reporting obligations
Figure has approached this challenge deliberately. The Provenance blockchain is permissioned, meaning known, vetted entities operate the network nodes. This structure gives regulators a clear point of oversight, unlike permissionless public networks. Furthermore, Figure has actively engaged with regulators, having previously received a no-action letter from the SEC for a different blockchain application. The OPEN network will likely initially serve institutional and accredited investors, navigating existing regulatory frameworks for private securities before expanding to broader public markets.
Potential Impacts on Market Structure and Participants
The successful adoption of on-chain stock trading via networks like OPEN could reshape financial market infrastructure. For exchanges and clearinghouses, the technology presents both a disruptive threat and an efficiency opportunity. Traditional roles may evolve from being central gatekeepers to becoming validators or service providers on decentralized networks. For broker-dealers, operations could become significantly cheaper and faster, potentially lowering costs for end investors. Custodians would see their role transform, focusing on securing the private keys to blockchain wallets rather than physical or electronic share certificates.
For companies issuing stock, the process could become more streamlined and cost-effective. A direct on-chain issuance, often called a “digital IPO,” might reduce underwriting fees and administrative burdens. It could also enable more dynamic capital management, such as programmable dividends or automated shareholder communications. For investors, the benefits center on accessibility, liquidity, and transparency. Fractional shares of any company could be traded 24/7 on a global ledger, with ownership records immutable and instantly verifiable.
Expert Analysis on the Technological Shift
Financial technology analysts observe that Figure’s move is part of a broader convergence. “We are witnessing the logical next step in the digitization of finance,” notes a fintech research director at a major consultancy. “First came electronic trading, then algorithmic execution. Now, the settlement and ownership layer itself is being digitized through distributed ledger technology. The key differentiator for Figure is their vertical integration—they control the blockchain stack, the lending platform, and now the trading network, which could create powerful network effects.”
However, experts also caution that technological superiority alone does not guarantee success. Adoption requires building trust across a fragmented ecosystem of brokers, market makers, and regulators. The network must demonstrate not only speed and cost savings but also unwavering resilience and security. Previous attempts at blockchain-based securities trading, such as the tZero platform, have seen slower-than-expected uptake, highlighting the difficulty of changing entrenched behaviors and systems.
Conclusion
The launch of the OPEN network by Figure Technology Solutions marks a pivotal moment in the evolution of capital markets. By enabling the on-chain trading of tokenized public stocks, Figure is challenging the foundational infrastructure of global equity markets. This initiative promises greater efficiency, transparency, and accessibility. Nevertheless, its long-term success hinges on navigating complex regulatory landscapes and achieving critical mass among institutional participants. As the financial world watches, the OPEN network could either become a cornerstone of a new digital market architecture or a valuable case study in the arduous journey of financial innovation. The push for seamless on-chain stock trading is undoubtedly accelerating.
FAQs
Q1: What exactly is the OPEN network?
The OPEN network is a blockchain-based platform developed by Figure Technology Solutions. It allows companies to issue digital tokens representing their publicly traded stock and enables investors to trade these tokenized securities directly on the blockchain.
Q2: How are tokenized stocks on the OPEN network different from traditional shares?
Tokenized stocks are digital representations of ownership recorded on a blockchain. While they are backed 1:1 by real shares held in custody, they enable faster settlement (potentially in seconds), reduced intermediary costs, and can be programmed with additional functionality, unlike traditional electronic book-entry shares.
Q3: Can retail investors trade stocks on the OPEN network today?
Initially, access will likely be restricted to institutional and accredited investors as the platform navigates existing securities regulations. Broad retail access would require further regulatory clarity and approval, which is a longer-term possibility but not an immediate feature.
Q4: What blockchain does the OPEN network use?
The network is built on the Provenance blockchain, a permissioned, proof-of-stake blockchain also developed by Figure. It is specifically designed for regulated financial applications and already handles significant transaction volume for other financial products.
Q5: What are the main risks associated with trading tokenized stocks on-chain?
Key risks include regulatory uncertainty, the technological risk of smart contract bugs or network vulnerabilities, the evolving landscape of digital asset custody, and the potential for limited initial liquidity compared to established public exchanges like the NYSE or NASDAQ.