a16z Crypto Operations Partner: Wall Street Upgrading Its Infrastructure at the Largest Scale in 30 Years

Author: Jason Rosenthal, a16z Operating Partner

Translation: Hu Tao, ChainCatcher

Wall Street is no longer just exploring blockchain; it is migrating toward it.

For years, institutions that form the backbone of global capital markets—exchanges, clearinghouses, and electronic trading platforms—have been observing. Now, they are shifting onto the 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 this until the transformation is complete.

Why Now: Speed Changes Everything

All institutions moving in this direction firmly believe—on-chain infrastructure will significantly accelerate the flow of capital. History has already proven this.

Think back to the development of electronic trading in the 1990s: before Electronic Communication Networks (ECNs) and online brokers, a trade took minutes to complete, spreads were measured in cents, and trading permissions were limited by geography and capital. Then, infrastructure changed. Spreads shrank dramatically. Commissions dropped from $150 to $9.95, eventually to zero. Trading volume exploded. Retail participation increased substantially. The markets of the 2000s are vastly different from those of the 1990s—not only cheaper but also larger in scale.

Tokenization applies the same logic to the entire global financial system: 24/7 markets, instant settlement, seamless cross-border distribution, breaking assets out of six-figure minimum lockups, real-time collateral flow instead of overnight idle assets. Faster trading. Broader participation. A bigger market share.

But what exactly does tokenization mean? Tokenized assets are digital representations of real-world assets (RWA)—such as government bonds, Apple stocks, real estate deeds—recorded on a programmable blockchain. Unlike traditional ownership tracking by custodians within specific time zones via centralized databases, tokenized assets exist on the chain: transferable, programmable, and settled instantly at any time globally.

They are not derivatives but real assets—with a more robust underlying architecture.

Institutions have already begun acting.

By 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. In 2024, DTCC processed $3.7 trillion in transactions. Its goal is to launch U.S. Treasury tokenization services 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 shares, instant settlement, and stablecoin financing—in partnership with BNY Mellon and Citigroup, supporting tokenized deposits from Intercontinental Exchange (ICE) Clearing. The world’s most iconic securities exchange is moving toward on-chain trading.

Tradeweb completed its first real-time, full-chain financing of U.S. Treasuries using USDC as the counterparty in August 2025—this transaction was completed on a Saturday, bypassing traditional settlement windows, involving participants like Bank of America, Citadel Securities, DTCC, and Virtu Financial. Since then, this financing model has expanded quarterly, now covering cross-border and intraday settlements. Nasdaq submitted proposed rule changes to the SEC in September 2025.

This increasingly looks like a migration rather than isolated experiments.

Hidden Costs in the Current System

Another factor driving this shift is that the current market is built around intermediaries, not the market itself.

Let’s look at a typical securities trade: traders pay spreads to brokers. In institutional trading, prime brokers charge financing fees. Exchanges and transfer agents take commissions. Custodians charge safekeeping fees. DTCC charges fees for clearing, netting, and settlement. Even with the U.S. achieving T+1 settlement in 2024—after decades of reform requiring days—the funds are still locked overnight, effectively imposing a “structural tax” on all participants.

Smart contracts and atomic settlement break this deadlock. Now, trading parties can settle immediately on-chain, with finality.

The profit margins in the existing system—its profitability—haven’t disappeared… they’ve become opportunities for new entrants. In other words, their profit margins are your chance to build the new system.

The ultimate breakthrough is regulatory clarity—and that process has finally begun. If current momentum continues, the CLARITY Act’s impact on traditional finance will be as transformative as the GUSD Act’s role in popularizing and accelerating stablecoins.

The safeguards needed by large institutions are already emerging. So, what does this mean for builders?

The migration of global financial infrastructure onto the chain will create demand for entirely new products and services.

The fastest-moving existing companies are not your competitors—they are your customers. DTCC doesn’t want to build middleware. NYSE doesn’t want to develop compliance tools. Tradeweb isn’t building 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 very much like the pattern of the 1990s. Exchanges didn’t build E*TRADE. They didn’t build Bloomberg terminals. They didn’t create the next-generation order management systems or prime broker platforms. These platforms were created by founders who foresaw the future.

More participants. Faster circulation. Less friction.

Higher liquidity. Larger markets.

History has clearly shown the ultimate direction of all this.

The window to build tokenized financial market infrastructure is open. Seize the opportunity and develop steadily.