Exchanges cannot build the next-generation financial system; entrepreneurs are the true protagonists.

Author: Jason Rosenthal Source: a16zcrypto Translation: Hello brother, Golden Finance

Wall Street is no longer just exploring blockchain—it’s moving toward full-scale adoption.

After years of watching from the sidelines, the institutions that form the backbone of global capital markets—exchanges, clearinghouses, and electronic trading platforms—are rolling out plans for on-chain infrastructure.

What’s happening right now is the largest infrastructure upgrade to capital markets since the shift to electronic trading three decades ago. But most people won’t realize the significance of this turn until the transition is complete.

Why now: Faster flow changes everything

All institutions moving in this direction share the same belief: on-chain infrastructure will significantly improve the efficiency of capital flows. History has already made clear what kind of transformation this can bring.

Think back to the changes brought by electronic trading in the 1990s: before electronic communications networks (ECNs) and online brokerages emerged, executing a trade took minutes, the bid-ask spread was measured in fractions of dollars, and trading permissions were limited by geography and capital thresholds. Then infrastructure innovations dramatically narrowed spreads—commissions fell from $150 to $9.95, eventually to zero—trading volumes surged, and retail participation skyrocketed. Early 21st-century markets were fundamentally different from the 1990s—not only were trading costs lower, but the market expanded to unprecedented size.

Tokenization applies this logic across the entire global financial system: markets available 24/7, instant settlement, seamless cross-border distribution, assets that previously required six-figure minimum investment thresholds become divisible into fragments, and collateral moves in real time rather than sitting idle overnight. Higher capital efficiency, broader participation, a bigger “market pie.”

But what does tokenization actually mean? Tokenized assets are digital representations of real-world assets (RWA)—U.S. Treasuries, Apple stock, real-estate deeds—recorded on a blockchain in the form of programmable tokens. Unlike ownership recorded by a custodian in a centralized database during working hours in a single time zone, tokenized assets exist on-chain: they can be transferred anywhere, anytime around the world, are programmable, and settle instantly.

They are not derivatives; they are the assets themselves—just sitting on a more efficient underlying system.

Institutions are already acting

In December 2025, the U.S. Securities Depository and Clearing Corporation (DTCC) received a letter of exemption from the U.S. Securities and Exchange Commission (SEC), allowing it to tokenize real-world assets on specified blockchains. In 2024, the trading volume handled by DTCC reached $37 trillion. The company plans to launch commercial tokenization services for U.S. Treasuries in the first half of 2026.

On January 19, 2026, the New York Stock Exchange announced the launch of an on-chain platform to enable 24/7 trading and settlement of U.S. stocks and ETFs. It supports fractional holdings, instant settlement, and settlement using stablecoin funds. In cooperation with Bank of New York Mellon and Citigroup, it will also support tokenized deposits within ICE’s clearing framework. The world’s most iconic securities exchange has officially entered the on-chain era.

In August 2025, Tradeweb, together with Bank of America, Castle Securities, DTCC, and Wealth Tree Financial, completed the first U.S. Treasury financing transaction based on the U.S. dollar stablecoin (USDC)—fully chain-based and real-time. The trade took place on a Saturday, outside traditional settlement hours. The business continues to expand each quarter and now covers cross-border and intraday settlement. In September 2025, Nasdaq also submitted a rule change proposal to the SEC.

This is increasingly beginning to look like a systemic migration—not a series of isolated experiments.

Hidden costs in the current system

Another force driving all this is that today’s market is built around intermediaries, not the market itself.

Take a typical securities transaction as an example: investors pay a spread to brokers. In institutional trading, the prime broker charges financing fees. Exchanges and transfer registration institutions split the revenue. Custodians charge asset custody fees. DTCC charges fees across clearing, netting, and settlement. Even though the U.S. finally achieved T+1 settlement in 2024 (a reform that took decades—previously settlement took days), funds will still be locked up overnight, becoming a “structural tax burden” borne by all participants.

Smart contracts and atomic settlement upend this layered setup. Counterparties can complete the trade instantly on-chain, achieving final legal ownership confirmation.

The intermediary take-rates in the current system—and thus their profit margins—don’t disappear; instead, they become an opportunity for newcomers. In other words, their profits are your chance to build a new-generation financial rails.

The key to breaking the deadlock ultimately lies in regulatory clarity, and that process has already started. If the current momentum continues, the significance of the “Clear Act” for traditional finance may be like the “FIT Act” in driving the adoption and development of stablecoins.

The regulatory framework large institutions need is already within reach. What does that mean for builders?

As global financial infrastructure migrates on-chain, it will create demand for entirely new categories of products and services. The fastest traditional giants to enter are not your competitors—they are your customers. DTCC has no intention of building middleware; the NYSE doesn’t want to develop compliance tools; and Tradeweb won’t build cross-border distribution layers.

These firms are laying compliance-grade, institutional-grade foundation layers. Entrepreneurs will build all the applications and services on top of them.

This mirrors the development path of the 1990s. Exchanges didn’t build E*TRADE for you, didn’t develop a Bloomberg terminal, and didn’t create the order-management system and prime broker platform that defined the next era—those were built by entrepreneurs with foresight into trends.

More participants, faster capital flow efficiency, less friction in trading. Greater liquidity, a larger market.

History has already pointed to the end direction. The window for building core infrastructure for tokenized financial markets is already open. Seize the moment—build now, and build immediately.