Is Wall Street planning to move the entire financial system onto the blockchain?

Wall Street is fully moving on-chain, has the largest infrastructure revolution in the history of traditional finance begun?

Written by: Jason Rosenthal

Translated by: AididiaoJP, Foresight News

Wall Street is no longer merely symbolically exploring blockchain but is migrating towards it.

After years of hesitation, various institutions that serve as the pillars of the global capital markets—including exchanges, clearinghouses, and electronic trading platforms—are transferring their businesses on-chain.

What is happening now is the largest infrastructure upgrade in capital markets since the shift to electronic trading thirty years ago.

However, most people will only realize this change has occurred after it is complete.

Why now: Speed changes everything

Every institution moving in this direction shares the same belief—that on-chain infrastructure will significantly enhance the speed of capital flow. History has clearly shown what results this will bring.

Looking back at the transformation brought about by electronic exchanges in the 1990s: before the emergence of electronic communication networks and online brokers, it took several minutes to execute a transaction, bid-ask spreads were quoted in fractions, and market access was limited by geography and capital size. With improvements in infrastructure, spreads narrowed significantly, commissions dropped from $150 to $9.95, then to zero, trading volume exploded, and retail investor participation markedly increased. By the turn of the 21st century, the market landscape was vastly different from the 1990s—not only had costs decreased significantly, but the market size also expanded tremendously.

Tokenization applies the same logic to the entire global financial system: enabling 24/7 trading, instantaneous settlement, and seamless cross-border circulation, it will fractionalize assets that previously required six-figure capital thresholds and allow collateral to flow in real time instead of sitting idle overnight. This will result in faster capital turnover, broader participation, and a larger overall market size.

What does tokenization specifically mean? Tokenized assets refer to digital representations of real-world assets—such as U.S. Treasury bonds, Apple stock, real estate contracts—recorded on the blockchain in the form of programmable tokens. Unlike the traditional model where custodians track ownership through centralized databases during business hours in a single time zone, tokenized assets exist on-chain: they can be instantaneously transferred, programmed, and settled from anywhere in the world at any time.

They are not derivatives, but the actual assets themselves with superior underlying infrastructure.

Institutions are taking action

In December 2025, the U.S. Securities Custody and Settlement Company received a no-action letter from the U.S. Securities and Exchange Commission, allowing it to tokenize real-world assets on an approved blockchain. The total transaction volume processed by the U.S. Securities Custody and Settlement Company in 2024 reached $3.7 trillion. The company plans to launch production-grade tokenization services for U.S. Treasury bonds in the first half of 2026.

On January 19, 2026, the New York Stock Exchange announced the launch of a platform for 24/7 on-chain trading and settlement of U.S. stocks and exchange-traded funds—supporting fractional trading, instant settlement, and stablecoin financing—and partnered with BNY Mellon and Citibank to provide tokenized deposit support for the clearinghouse under Intercontinental Exchange. The world’s most iconic securities exchanges are migrating on-chain.

In August 2025, Tradeweb completed its first fully on-chain, real-time transaction financed by USDC for U.S. Treasury bonds—the transaction took place on a Saturday, outside traditional settlement windows, with participants including Bank of America, Castle Securities, the U.S. Securities Custody and Settlement Company, and Virtu Financial. Its scope of business continues to expand each quarter, now covering cross-border settlement and intraday settlement. Nasdaq also submitted its own rule change proposal to the U.S. Securities and Exchange Commission in September 2025.

These trends increasingly reflect a movement toward an overall migration rather than isolated experimental attempts.

Hidden costs in the existing system

Another force driving this process is the structure of the existing market, which is built around intermediaries rather than centered on the market itself.

Take a typical securities transaction as an example: investors pay the bid-ask spread to brokers. In institutional trading, prime brokers charge financing fees. Exchanges and transfer agents charge their respective fees. Custodians charge asset custody fees. The U.S. Securities Custody and Settlement Company charges fees at all stages of clearing, net settlement, and settlement. Even if the U.S. achieves T+1 settlement in 2024—this reform took decades due to previous settlement cycles lasting several days—capital still needs to be locked overnight, constituting a “structural cost” for all participants.

Smart contracts and atomic settlement technology can compress these layers. Now, both parties to a trade can complete transactions on-chain instantly and achieve final settlement.

The rent extraction in the existing system—its profit margins—will not disappear… but will transform into opportunities for new entrants. In other words, the profit margins of existing institutions are where your opportunity to build new infrastructure lies.

The final key is regulatory clarity—and this condition is finally beginning to materialize. If the current momentum continues, the impact of the CLARITY Act on traditional finance is expected to be as significant as the impact of the GENIUS Act on the adoption and development of stablecoins.

The institutional guarantees that large institutions are looking for are just around the corner. 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 most agile legacy institutions are not your competitors, but your clients. The U.S. Securities Custody and Settlement Company has no intention of developing middleware, the New York Stock Exchange has no intention of building compliance tools, and Tradeweb has no intention of creating cross-border distribution layers.

These institutions are laying down a regulated, institution-standard foundational layer. The founders are responsible for building all applications that operate on top of it.

This mirrors the development models of the 1990s. Exchanges did not create ETRADE, nor did they create Bloomberg, and they certainly did not develop the order management systems and prime broker platforms that defined the next era. These outcomes were all realized by founders who foresaw future trends.

More participants joining, faster capital turnover, and lower trading friction.

More abundant liquidity and broader market space.

History has clearly revealed the ultimate direction of this process.

The window for building foundational infrastructure for tokenized financial markets has now opened.