If the entire U.S. financial market is fully on-chain

Author: 0xLeoDeng, Partner and Head of Investments at LK Ventures

On December 4th, SEC Chairman Paul Atkins shared a vision in his interview on Fox Business’s “Mornings with Maria” that “the entire US financial market could migrate on-chain within two years.” This sounds so radical it borders on science fiction.

But if we set aside skepticism about the timeline and treat this as a serious future scenario: If this really happens, what would the US economy be reshaped into?

This isn’t just a simple technical upgrade, but a complete reformatting of the financial system’s underlying operating system. Here are seven structural transformations:

1. Market Structure: A “Light-Speed Machine” That Never Sleeps

The first thing to be noticed would be the change in the market’s heartbeat.

* The T+0 era of instant capital turnover. Traditional T+1/T+2 settlement cycles would become history. Trades settle instantly; funds are no longer delayed. This means the velocity of money would dramatically increase, structurally compressing capital costs across the entire economy.

* The disappearance of the “closing bell.” Markets, like crypto today, would run 24/7. Emotions and volatility would no longer have physical barriers. The old “market’s closed, let’s resume tomorrow” buffer period would vanish, and good news or black swans anywhere in the world would impact asset prices in milliseconds.

* SEC regulation becomes “real-time cruising.” On-chain means absolute transparency. Who’s building positions, who’s naked short selling, where liquidity is drying up—regulators would no longer rely on delayed reports but directly monitor on-chain data. For manipulators, it’s a nightmare; for markets, it’s a new fairness brought by “embedded regulation.”

2. Banking: From “Black Box” to “Glass House”

The impact of going on-chain on commercial banks would be far deeper than on exchanges.

* “Semi-public” balance sheets. When treasuries and credit assets are tokenized, both regulators and markets can see banks’ liquidity and collateral quality in real time.

* Double-edged sword effect: SVB-style (Silicon Valley Bank) asset-liability mismatch risks would be easier to preempt; but in a highly transparent world, fear spreads with no resistance—“bank runs” could happen more swiftly and fatally.

* Everything can be collateralized: A company’s receivables, inventory, even future cash flows can be turned into standardized on-chain collateral via smart contracts. Financing efficiency would skyrocket, but regulatory focus must shift from “on-balance-sheet loans” to monitoring those complex “programmable leverage” positions on-chain.

3. Real Economy: The “Granularity” Revolution of Capital

This is perhaps the most underestimated aspect—on-chain will bring “democratization of assets.”

* “Micro-IPOs” for SMEs. Just as internet ads allowed small businesses to reach customers, on-chain finance lets small and medium enterprises issue compliant “micro-securities.” Financing is no longer a privilege for giants; capital’s capillaries will flow deep into grassroots economies via blockchain.

* Unlocking liquidity in non-standard assets: Office buildings, power stations, even patent rights—previously only available to big institutions—could be fractionalized, allowing global investors to buy one ten-thousandth of an asset just like a stock.

For the US, this means domestic assets would gain a huge “liquidity premium,” attracting global capital.

4. Geopolitics: The “Digital Reinforcement” of Dollar Hegemony

Many mistakenly think “on-chain” means decentralization and weakening of state power, but actually the opposite is true.

If the US leads in tokenizing treasuries and money market funds (MMFs), letting global capital buy US dollar assets at the lowest cost, fastest speed, and zero entry barriers—this would be the dollar’s strongest moat.

By contrast, if Eurasian markets cannot keep up with regulation and infrastructure, capital will “vote with its feet,” flocking to the more efficient and transparent US dollar on-chain system. This isn’t the decline of the dollar, but a generational upgrade of monetary infrastructure.

5. Risk Restructuring: Crises Won’t Disappear, They’ll “Mutate”

Financial crises in the on-chain era will take new forms.

* From “human panic” to “code failure.” Smart contract bugs, oracle manipulation, cross-chain bridge collapses, and chain reactions from automated liquidations will become new systemic risks.

* The “pressure cooker” effect of crises. Future crises will be more “technical” and “concentrated.” They may erupt and end within minutes, not months like in 2008. Bailouts won’t depend on “weekend negotiations,” but on “data decisions” and “code patches.”

6. Winners and Losers: A Reshuffling of Niches

Potential winners:

• Infrastructure builders: On-chain custody, identity authentication (DID), compliant oracle service providers.
• Next-generation investment banks: Large asset managers who know how to matchmake on-chain assets globally.
• Hybrid talent: Rare professionals fluent in both financial compliance and Solidity code.

Transformation pain points:

• Traditional intermediaries: Clearinghouses, transfer agents, brokers who profit from information asymmetry—if they don’t reinvent themselves, they’ll be replaced by smart contracts.
• Gray industries: Any sector relying on opaque or non-compliant fund flows will have nowhere to hide under fully traceable, on-chain regulation.

7. Realistic Calm: The Direction Is Certain, Only the Speed Is Variable

Finally, back to reality. Full implementation within two years? Almost impossible.

Bottlenecks in technical throughput, lagging legal frameworks, and resistance from entrenched interests—these three mountains won’t be moved in 24 months.

A more likely path is gradual: starting with treasuries, repo markets, and some OTC derivatives, with new and old systems running in parallel and gradually eating away at the old world.

But regardless of speed, the direction Paul Atkins pointed out is irreversible. This is not just a technical iteration, but a natural move for capital seeking greater efficiency. The future of the US financial market is destined to be on-chain.