a16z Crypto Operating Partner: Wall Street is undergoing its biggest infrastructure upgrade in 30 years

Author: Jason Rosenthal, a16z Operating Partner

Translation: Hu Tao, ChainCatcher

Wall Street is no longer only exploring blockchain—it’s actively migrating toward 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. Now they’re turning to the on-chain world.

What’s happening right now is the largest infrastructure upgrade to capital markets since the rise of electronic trading some thirty years ago.

But most people won’t realize it until the transformation is complete.

Why the shift now: speed changes everything

Every institution moving in this direction firmly believes one thing—on-chain infrastructure will significantly increase the speed at which capital flows. History has already made that clear.

Look at the evolution of electronic trading in the 1990s: before electronic trading networks (ECNs) and online brokers appeared, it took minutes to complete a trade, spreads were measured in fractions of a dollar, and trading permissions were constrained by geography and access to capital. Then the infrastructure changed. Spreads fell dramatically. Commissions dropped from $150 to $9.95, and eventually to zero. Trading volume exploded. Retail participation surged as well. The 2000s market was completely different from the 1990s—prices were lower, and the scale was larger, too.

Tokenization applies the same logic across the entire global financial system: markets that operate 24/7, instant settlement, seamless cross-border distribution, breaking up assets that were previously locked behind six-figure minimum thresholds, and having collateral move in real time rather than sitting idle overnight. Higher trading speed. Wider participation. A bigger market.

But what exactly does tokenization mean? Tokenized assets are digital representations of real-world assets (RWAs)—for example, U.S. Treasuries, Apple stock, real-estate deeds—recorded on the blockchain in the form of programmable tokens. Unlike traditional tracking of ownership through centralized databases during the working hours of custodians in specific time zones, tokenized assets exist on-chain: transferable, programmable, and settled instantly at any time anywhere in the world.

It’s not derivatives—it’s real assets—and it comes with a better underlying architecture.

Institutions have already started acting.

In December 2025, the DTCC received a no-objection letter from the U.S. Securities and Exchange Commission (SEC), authorizing it to tokenize real-world assets on an already approved blockchain. In 2024, DTCC processed $3.7 quadrillion in transactions. Its goal is now to launch tokenized U.S. Treasuries services in the first half of 2026.

On January 19, 2026, the New York Stock Exchange announced the launch of a platform for on-chain trading and settlement of U.S. stocks and ETFs around the clock (24/7)—including fractional-share trading, instant settlement, and stablecoin financing—and in partnership with BNY and Citigroup to support tokenized deposits for the ICE clearinghouse. The most iconic securities exchange in the world is moving toward on-chain trading.

In August 2025, Tradeweb completed its first real-time on-chain financing of U.S. Treasuries with USDC as consideration. The transaction was completed on Saturday, bypassing the traditional settlement window. Participants included Bank of America, Citadel Securities, DTCC, and Virtu Financial. Since then, this financing model has expanded each quarter and now covers cross-border and intraday settlement. In September 2025, Nasdaq submitted to the U.S. Securities and Exchange Commission (SEC) its proposed rule changes.

It’s starting to look less like a series of isolated experiments—and more like a migration.

The hidden costs in the current system

There’s a second factor driving all of this: the existing market is built around intermediaries, not the market itself.

Let’s look at a typical securities trade: a trader pays the broker the spread. In institutional trading, the primary broker charges financing fees. Exchanges and transfer agents take commissions from that flow. Custodians charge custody fees. DTCC charges fees during clearing, net settlement, and the settlement process. Even though the U.S. ultimately achieved T+1 settlement in 2024—a reform that took decades because it used to take days—funds are still locked up overnight. That amounts to a “structural tax” on all participants.

Smart contracts and atomic settlement break this stalemate. Now both trading parties can complete the trade immediately on-chain, and the outcome has finality.

The profit pool in the existing system—its margins—didn’t disappear… it became an opportunity for new entrants. In other words, their profit pool is your opportunity to build a new system.

The final breakthrough lies in regulatory clarity—and this process has finally begun. If the current momentum can be sustained, the impact of the CLARITY Act on traditional finance will be as significant as what the Genius Act achieved for the adoption and acceleration of stablecoins.

The safeguards that large institutions need are already starting to take shape. So what does that mean for builders?

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

The fastest-moving existing businesses aren’t your competitors—they’re 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 the cross-border distribution layer.

These companies are building regulated, institutional-grade infrastructure. And founders build all the products that run on top of it.

It’s exactly like the 1990s model. Exchanges didn’t build E*TRADE. They didn’t build the Bloomberg Terminal. They didn’t build the order management systems and primary broker platforms that defined the next era. Those platforms were created by founders who anticipated future trends.

More participants, faster capital circulation, lower friction.

Higher liquidity, a bigger market.

History has already made the ultimate direction clear.

The window to build the foundational infrastructure for a tokenized financial market is now open. Seize the moment and develop steadily.