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

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

By: Jason Rosenthal

Translated by: AididiaoJP, Foresight News

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

After years of hesitation, various institutions that serve as the backbone of global capital markets—including exchanges, clearing houses, and electronic trading platforms—are transitioning their operations on-chain.

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

However, most people will only realize this transformation after it has been completed.

Why now: Speed changes everything

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

Looking back at the transformation brought about by electronic exchanges in the 1990s: before the emergence of electronic communication networks and online brokers, a single trade could take minutes to execute, bid-ask spreads were quoted in fractions, and market access was limited by geography and capital size. With improvements in infrastructure, spreads narrowed sharply, commissions fell from $150 to $9.95, and then to zero, leading to explosive growth in trading volume and a significant increase in retail investor participation. By the 21st century, the market landscape had changed dramatically compared to the 1990s—not only were costs significantly reduced, but market size also expanded greatly.

Tokenization applies the same logic to the entire global financial system: enabling 24/7 trading, instant settlement, and seamless cross-border circulation, allowing assets that previously required a six-figure capital threshold to be fractionalized, and enabling collateral to flow in real-time rather than being idle overnight. This results in faster capital turnover, broader participation, and a larger total market size.

What does tokenization specifically mean? Tokenized assets refer to digital representations of real-world assets—such as U.S. Treasury bonds, shares of Apple Inc., and real estate contracts—recorded on the blockchain in programmable token form. 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 instantly transferred, programmed, and settled at any location and at any time globally.

They are not derivatives but the real assets themselves with enhanced underlying infrastructure.

Institutions are taking action

In December 2025, the U.S. Securities and Settlement Company received a no-action letter from the U.S. Securities and Exchange Commission, allowing for the tokenization of real-world assets on approved blockchains. The U.S. Securities and Settlement Company processed a total of $37 trillion in transactions in 2024. 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 collaborated with Bank of New York Mellon and Citibank to provide tokenized deposit support for the clearinghouse under Intercontinental Exchange. The world’s most iconic securities exchanges are moving on-chain.

In August 2025, Tradeweb completed its first fully on-chain, USDC-financed real-time transaction involving U.S. Treasury bonds—executed on a Saturday, outside traditional settlement windows, with participants including Bank of America, Castle Securities, U.S. Securities and Settlement Company, and Virtu Financial. Its business scope 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 developments increasingly reflect a trend of overall migration rather than isolated experimental attempts.

Hidden costs within the existing system

A second force driving this process is that the existing market structure is built around intermediaries rather than centered on the market itself.

For a typical securities trade: investors pay the bid-ask spread to brokers. In institutional trading, the prime broker charges financing fees. Exchanges and transfer agents charge corresponding fees. Custodians charge asset custody fees. The U.S. Securities and Settlement Company incurs charges at each step of clearing, net settlement, and settlement. Even if the U.S. achieves T+1 settlement in 2024—after decades of reform due to the previous settlement period lasting several days—funds still need to be locked overnight, constituting a “structural cost” for all participants.

Smart contracts and atomic settlement technology can compress these layers. Now, counterparties can complete trades on-chain instantly and achieve final settlement.

The rent extraction present 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 represent the opportunities for you to build new infrastructure.

The final key lies in 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 similar to that of the GENIUS Act on the adoption and development of stablecoins.

The institutional safeguards anticipated by large organizations are just around the corner. So what does this mean for builders?

The migration of global financial infrastructure to on-chain will create demand for entirely new categories of products and services.

The legacy institutions that act most swiftly are not your competitors but your clients. The U.S. Securities 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-grade foundational layer. Founders are responsible for building all applications that operate on top of this foundation.

This mirrors the development model 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 achievements were all crafted 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.