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

Author: Jason Rosenthal, a16z Operating Partner

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, and now they are turning to on-chain solutions.

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

But most people will only realize this once the transformation is complete.

Why the Shift Now: Speed Changes Everything

All institutions moving in this direction firmly believe in one thing—on-chain infrastructure will significantly enhance the speed of capital flow. History has clearly demonstrated this.

Think about the development of electronic trading in the 1990s: before the emergence of electronic communication networks (ECNs) and online brokers, a trade could take minutes to complete, spreads were calculated in fractions, and trading permissions were limited by geography and capital. Then, the infrastructure changed. Spreads dropped significantly. Commissions fell from $150 to $9.95, eventually reaching zero. Trading volumes exploded. Retail participation surged. The market of the 2000s was vastly different from that of the 1990s—not only were prices lower, but the scale was also larger.

Tokenization applies the same logic to the entire global financial system: 24/7 markets, instant settlement, seamless cross-border distribution, breaking the asset fragmentation locked by previous six-figure minimums, and real-time collateral movement instead of overnight idling. Higher trading speed. Broader participation. A larger market pie.

But what does tokenization really mean? Tokenized assets are digital representations of real-world assets (RWAs)—such as government bonds, Apple stock, real estate deeds—recorded on the blockchain in the form of programmable tokens. Unlike the past, where custodians tracked ownership through centralized databases during specific time zones, tokenized assets exist on-chain: transferable, programmable, and capable of instant settlement at any time globally.

They are not derivatives but real assets—and they have a more robust underlying infrastructure.

Institutions have begun to take action.

In December 2025, DTCC received a no-action letter from the U.S. Securities and Exchange Commission (SEC) authorizing it to tokenize real-world assets on an approved blockchain. DTCC processed $37 trillion in transactions in 2024. Its goal is to launch tokenization services 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 financing—and partnered with BNY and Citigroup to support tokenized deposits for the Intercontinental Exchange (ICE) clearinghouse. The world's most iconic stock exchanges are moving towards on-chain trading.

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

This increasingly looks like a migration rather than a series of isolated experiments.

Hidden Costs in the Current System

A second factor driving all this is that the existing market is built around intermediaries rather than 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 custody fees. DTCC charges fees during clearing, net settlement, and settlement processes. Even if the U.S. achieves T+1 settlement in 2024—this reform has taken decades because it used to take days—capital will still be locked overnight, which amounts to a "structural tax" on all participants.

Smart contracts and atomic settlement break this deadlock. Now, both parties can complete trades on-chain immediately, and the trade results are final.

The profit margins in the existing system—i.e., its profitability—have not disappeared... but rather become opportunities for new entrants. In other words, their profit margins are your opportunity to build a new system.

The ultimate 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 akin to the achievements of the Genius Act in popularizing and accelerating the development of stablecoins.

The safeguards that large institutions need are beginning to take shape. So, what does this 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 enterprises are not your competitors—but your clients. DTCC does not want to build middleware. The New York Stock Exchange does not want to build compliance tools. Tradeweb does not want to build cross-border distribution layers.

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

This is reminiscent of the model from the 1990s. Exchanges did not build E*TRADE. They did not build Bloomberg terminals. They did not build the order management systems and prime brokerage platforms that defined the next era. These platforms were created by founders who foresaw future trends.

More participants, faster circulation, lower friction.

Higher liquidity, larger markets.

History has clearly indicated the ultimate direction of all this.

The window for building tokenized financial market infrastructure has opened. Seize the opportunity and grow steadily.