SPAC Targets Bank in Blockchain Push

Figure Acquisition Corporation (FACA) is in talks to acquire an unnamed banking group with a view to exploring the possibilities of blockchain technology.

The San Francisco-based special purpose acquisition company (SPAC) announced late last week it was in discussions with “a large warehouse lender and bank holding company with nationwide residential mortgage lending and servicing operations”, according to a statement.

FACA said it had signed a “non-binding letter of intent” regarding the proposed deal.

While FACA did not disclose the name of the bank or where it is headquartered, it said the bank had $3-5 billion in assets and specialized in home loans across the US.

Michael Cagney, chairman of FACA’s board, said the deal “provides a unique value creation opportunity by combining the bank’s sound balance sheet, nationwide footprint and seasoned management team with our team’s deep understanding of, and experience with, the application of technology to regulated financial services businesses as well as the necessary capital to grow and execute against our shared vision of the future of banking”.

FACA’s statement also said it would explore how to bring blockchain — or distributed ledger technology — to the bank’s operations, which “could bring strong potential value to the bank and its warehouse customers”. FACA specializes in buying companies in order to explore the uses of blockchain.

FACA is backed by Fintech Acquisition LLC, an affiliate of Figure Technologies. Figure provides blockchain, artificial intelligence and analytics services to financial services companies.

Last month, the Federal Reserve Bank of New York announced a joint project with several banks to develop a “proof of concept” for a digital money platform using distributed ledger technology.