a16z: Wall Street is undergoing its biggest infrastructure upgrade in 30 years, and on-chain migration is a foregone conclusion.

Author: Jason Rosenthal, Operating Partner at a16z

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, but now they are turning to blockchain.

What is happening now is the largest infrastructure upgrade of the capital markets since the rise of electronic trading thirty years ago.

But most people won't realize this until the change is complete.

Why the shift now: Speed ​​changes everything

All institutions moving in this direction firmly believe that on-chain infrastructure will significantly improve the velocity of funds. History has clearly proven this.

Consider the evolution of electronic trading in the 1990s: before the advent of Electronic Trading Networks (ECNs) and online brokers, a trade took minutes to complete, spreads were calculated in fractions of a point, and trading access was limited by geography and capital. Then, the infrastructure changed. Spreads plummeted. Commissions dropped from $150 to $9.95, eventually to zero. Trading volume exploded. Retail participation also increased dramatically. The market in the 2000s was drastically different from that of the 1990s—not only were prices lower, but the market was also much larger.

Tokenization applies the same logic to the entire global financial system: 24/7 markets, instant settlement, seamless cross-border distribution, breaking the previous six-figure minimum asset lock-up limits, and real-time collateral liquidity rather than overnight idleness. Higher transaction speeds. Wider participation. A larger market share.

But what exactly does tokenization mean? Tokenized assets are digital representations of real-world assets (RWAs)—such as government bonds, Apple stock, and real estate deeds—recorded on a blockchain in the form of programmable tokens. Unlike traditional methods where ownership is tracked through a centralized database by custodians during specific time zones, tokenized assets exist on-chain: they are transferable, programmable, and can be settled instantly anytime globally.

It is not a derivative, but a real asset—and has a more robust underlying architecture.

Various agencies have begun taking action.

In December 2025, DTCC received a no-objection letter from the U.S. Securities and Exchange Commission (SEC), authorizing it to tokenize real-world assets on approved blockchains. DTCC processed $3.7 trillion in transactions in 2024. Currently, its goal is to launch a tokenization service 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 ETFs—including fractional share trading, instant settlement, and stablecoin funding—and partnered with Bank of New York (BNY) and Citigroup to support tokenized deposits at the Intercontinental Exchange (ICE) Clearing House. The world's most iconic stock exchange is moving towards on-chain trading.

Tradeweb completed its first real-time, full-chain financing of US Treasury bonds in USDC in August 2025—a transaction completed on a Saturday, bypassing traditional settlement windows. Participants included Bank of America, Citadel Securities, DTCC, and Virtu Financial. Since then, this financing model has expanded quarterly and now covers cross-border and intraday settlements. Nasdaq submitted its proposed rule changes to the US Securities and Exchange Commission (SEC) in September 2025.

This is increasingly looking more like a migration than a series of isolated experiments.

Hidden costs in the current system

There is a second factor driving all this: the existing market is built around intermediaries rather than the market itself.

Let's look at a typical securities transaction: traders pay spreads to brokers. In institutional trading, prime brokers charge financing fees. Exchanges and transfer agents take commissions. Custodians charge custody fees. The DTCC charges fees during clearing, netting, and settlement processes. Even if the US finally implements T+1 settlement in 2024—a reform decades in the making because it previously took several days—funds will still be locked overnight, effectively imposing a "structure tax" on all participants.

Smart contracts and atomic settlement have broken this deadlock. Now, both parties can complete a transaction instantly on-chain, and the transaction result has final effect.

The profit margins in the existing system—that is, its profit rate—have not disappeared…but have become opportunities for new entrants. In other words, their profit margins are your opportunities to build a new system.

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The ultimate breakthrough lies in regulatory clarity—and this process has finally begun. If the current momentum continues, the impact of the Clarity Act on traditional finance will be similar to the Genius Act's achievements in popularizing and accelerating the development of stablecoins.

The necessary safeguards for large-scale projects are beginning to emerge. So, what does this mean for the builders?

The migration of global financial infrastructure to the blockchain will create demand for entirely new categories of products and services.

The fastest-moving existing businesses 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. The founders are responsible for building all the products that run on it.

This is exactly the same model as in the 1990s. 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 generation. These platforms were created by founders who foresaw future trends.

More participants, faster circulation, and less friction.

Greater liquidity, larger market.

History has clearly shown the ultimate outcome of all of this.

The window of opportunity to build the infrastructure for the tokenized financial market has opened. Seize the opportunity and develop steadily.