Stabledash Live · · 17 min

CMT Digital's Sam Hallene on Figure, NEWITY, and What He Looks for in Founders

With Sam Hallene

Key takeaways

  • CMT Digital recently invested in NEWITY, a Chicago-based company that distributes government-backed SBA 7(a) small business loans onchain with several partners.

  • Sam Hallene says Figure's end goal is not HELOC origination but disrupting capital markets with an open network resembling the DTCC.

  • Hallene predicts every financial institution will be forced to adopt blockchain technology to realize its cost benefits.

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Summary

CMT Digital partner Sam Hallene explains a recent bet on an SBA lender, his view of Figure as a capital markets company, and why he thinks banks will be forced onchain.

CMT Digital has invested in NEWITY, a Chicago-based company that puts government-backed small business loans onchain, partner Sam Hallene said in an interview. The firm has been investing in blockchain since 2017 and has made more than 150 investments across protocols, tokens and companies.

The NEWITY bet

Sam Hallene called NEWITY a "really incredible Chicago based company" that the firm invested in "quite recently." He explained that the Small Business Administration runs a 7(a) program for originating small business loans, and that NEWITY's plan with several partners is to distribute those loans onchain.

He says NEWITY brings a "twenty first century approach" to originating and underwriting the loans, using AI and API-driven access to what he called "stodgy data sources." The company is live, and Hallene says he thinks it is the largest SBA originator by volume.

“The best founders, you know, it's like you almost feel like they couldn't have done anything else. Like, this like, this company that they're building is an the truest expression of, like, who they are.”
Sam Hallene

Figure beyond HELOCs

CMT Digital was early to Figure and has been an investor for almost seven years, Hallene says. In his account, the company's end goal is not to be a HELOC originator but to disrupt capital markets, building an open network like the DTCC today, only as a more open and user-friendly transfer agent and share registry.

He pointed to founder Mike Cagney's view on securities lending: that the yield should be owned by the user, not by the brokerage firm that intermediates the lending.

A unified onchain ledger

Sam Hallene expects "the table will flip," with stablecoins or tokenized deposits more common than physical cash, and equities more commonly held onchain than off. He says every financial institution will be "not only kind of, like, pushed, but actually forced" into the technology to realize the cost benefits.

Firm and founders

CMT Digital is a subsidiary of a 30-year trading and investment firm that has traded across many tens of countries and regulatory jurisdictions. Hallene, who first learned about Bitcoin in college in late 2015, has been at the firm for nine years and was the first analyst on its venture funds. Host Zach Fowler noted portfolio names including Zero Hash, TRM and Superstate.

On founders, Hallene says the best ones seem as though they could not have done anything else, with the company as "the truest expression" of who they are.

Both the NEWITY deal and Sam Hallene's reading of Figure point to the same bet: that loans, equities and payments will move to onchain rails because the cost savings will leave financial institutions little choice.

Figure, CMT Digital, Small Business Administration, and DTCC come up most.

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