Author: Jason Rosenthal, a16z Operating Partner
Compiled by: Hu Tao, ChainCatcher
Wall Street is no longer just exploring blockchain; it is migrating to it.
For years, the institutions that form the backbone of global capital markets—exchanges, clearinghouses, and electronic trading platforms—have been watching from the sidelines. Now, they are moving on-chain.
What is happening now is the largest infrastructure upgrade in capital markets since the rise of electronic trading thirty years ago.
But most people won't realize it until the transformation is complete.
Why the Shift Now: Speed Changes Everything
All institutions moving in this direction share one core belief—on-chain infrastructure will significantly increase the velocity of capital. History has clearly demonstrated this.
Think back to the development of electronic trading in the 1990s: before Electronic Communication Networks (ECNs) and online brokers emerged, a single trade could take minutes to complete, spreads were quoted in fractions, and access was restricted by geography and capital. Then, the infrastructure changed. Spreads narrowed dramatically. Commissions dropped from $150 to $9.95, and eventually to zero. Trading volume exploded. Retail participation surged. The markets of the 2000s were fundamentally different from those of the 1990s—not just cheaper, but larger.
Tokenization applies this same logic to the entire global financial system: 24/7 markets, instant settlement, seamless cross-border distribution, fractionalization of assets previously locked behind six-figure minimums, real-time collateral movement instead of overnight idleness. Higher transaction velocity. Broader participation. A larger market overall.
But what exactly does tokenization mean? A tokenized asset is a digital representation of a real-world asset (RWA)—such as a treasury bond, Apple stock, or a real estate deed—recorded on a blockchain as a programmable token. Unlike the past, where custodians tracked ownership in centralized databases during specific time zone business hours, tokenized assets exist on-chain: transferable, programmable, and capable of instant settlement globally, at any time.
It is not a derivative; it is the actual asset—but with a superior underlying architecture.
Institutions are already taking action.
In December 2025, DTCC received a no-action letter from the U.S. Securities and Exchange Commission (SEC), authorizing it to tokenize real-world assets on approved blockchains. DTCC processed $3.7 quadrillion in transactions in 2024. Its current goal is to launch a tokenized U.S. Treasury service in the first half of 2026.
On January 19, 2026, the New York Stock Exchange announced a platform for 24/7 on-chain trading and settlement of U.S. stocks and ETFs—including fractional shares, instant settlement, and stablecoin financing—in partnership with Bank of New York (BNY) and Citi Group, supported by tokenized deposits from ICE Clear Credit. The world's most iconic stock exchange is moving on-chain.
In August 2025, Tradeweb completed the first real-time, fully on-chain financing of a U.S. Treasury with USDC as consideration—this trade was executed on a Saturday, bypassing traditional settlement windows, with participants including Bank of America, Citadel Securities, DTCC, and Virtu Financial. Since then, this financing model has expanded quarterly and now includes cross-border and intraday settlement. Nasdaq submitted its proposed rule change to the SEC in September 2025.
This looks increasingly like a migration, not a series of isolated experiments.
The Hidden Costs in the Current System
A second factor driving this shift: the existing market is built around intermediaries, not the market itself.
Consider a typical securities trade: a trader pays a spread to a broker. In institutional trades, a prime broker charges financing fees. Exchanges and transfer agents take commissions. Custodians charge safekeeping fees. DTCC levies fees for clearing, netting, and settlement. Even with the U.S. finally achieving T+1 settlement in 2024—a reform decades in the making, as it previously took days—capital is still locked up overnight, effectively a "structural tax" on all participants.
Smart contracts and atomic settlement break this logjam. Now, counterparties can transact immediately on-chain with finality.
The profit margins in the existing system—their take rate—haven't disappeared... they've become the opportunity for new entrants. In other words, their margin is your opportunity to build the new system.
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The final breakthrough is regulatory clarity—and this process has finally begun. If the current momentum holds, the CLARITY Act's impact on TradFi will mirror what the Genius Act achieved for the adoption and acceleration of stablecoins.
The safeguards large institutions require are taking shape. So, what does this mean for builders?
The migration of global financial infrastructure on-chain will create demand for entirely new categories of products and services.
The fastest-moving incumbents are not your competitors—they are your customers. DTCC doesn't want to build middleware. The New York Stock Exchange doesn't want to build compliance tools. Tradeweb doesn't want to build a cross-border distribution layer.
These companies are building regulated, institutional-grade infrastructure. Founders are responsible for building all the products that run on top of it.
This is exactly the same pattern as the 1990s. The exchanges didn't build E*TRADE. They didn't build the Bloomberg terminal. They didn't build the order management systems and prime brokerage platforms that defined the next era. Those platforms were built by founders who saw the future coming.
More participants, faster velocity, lower friction.
Higher liquidity, larger markets.
History has made it abundantly clear where this ultimately leads.
The window to build the infrastructure for tokenized financial markets is open. Seize the moment, and build steadily.
