Jason Rosenthal of a16z Crypto says Wall Street is accelerating the migration to on-chain infrastructure.

by
Alyssa Davidson

Posted: March 27, 2026 10:30 AM Updated: March 27, 2026 10:03 AM

by Anastasia Oh

Correction and fact check date: March 27, 2026, 10:30 a.m.

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Jason Rosenthal, operating partner at a16z crypto, the venture capital arm of Andreessen Horowitz, focuses on cryptocurrencies and Web3, and shared his perspective on the ongoing transition of traditional financial institutions to blockchain-based infrastructure.

According to his recent post on social media platform X, Wall Street is no longer exploring blockchain. It is actively moving on-chain. Jason Rosenthal describes this trend as the biggest infrastructure upgrade in capital markets since the transition to electronic trading 30 years ago, warning that most market participants will not be aware of these changes until they are largely complete.

The executive explained that the main driver of the migration is the expected increase in the velocity of funds. He noted that similar to the electronic trading revolution of the 1990s, the introduction of ECNs and online brokerages transformed trading by narrowing spreads, reducing commissions and dramatically increasing market participation. He argued that tokenization offers similar opportunities across global financial markets, enabling 24/7 trading, instant payments, cross-border distribution, fractional access to previously high minimum assets, and real-time collateral movement.

He also clarified that tokenized assets are digital representations of real-world assets, including government bonds, company stocks, or real estate deeds, recorded on a blockchain network as programmable tokens. Unlike traditional systems that track ownership through centralized databases, these assets can be transferred, programmed, and settled instantly, regardless of time zone. He described tokenization as “not a derivative, but a real asset with better plumbing.”

Institutional players are driving the tokenization of financial markets and opening up opportunities for new infrastructure.

Jason Rosenthal emphasized that several organizations have already begun taking practical steps toward this migration. In December 2025, the Depository Trust & Clearing Corporation (DTCC) received a No-Action Letter from the U.S. Securities and Exchange Commission authorizing it to tokenize real-world assets on approved blockchains. DTCC, which processed $3.7 trillion in transactions in 2024, plans to launch tokenization services for U.S. Treasury bonds in the first half of 2026. In January 2026, the New York Stock Exchange, in collaboration with BNY Mellon and Citi, announced a platform for continuous on-chain trading and settlement of U.S. stocks and ETFs, allowing fractional shares, instant settlement, and stablecoin financing. Tradeweb executed the first fully on-chain U.S. Treasury financing for USDC in August 2025, with participation from Bank of America, Citadel Securities, DTCC, and Virtu Financial. Management observed that the scope of these initiatives is expanding quarterly to include cross-border and intraday payments, suggesting a broader migration rather than an isolated experiment.

Moreover, the executive cited inefficiencies in the current market structure, explaining that the existing financial system is “structured around intermediaries, not markets.” He explained that a typical securities transaction involves several fees extracted by brokers, prime brokers, exchanges, transfer agents, custodians and clearing houses. During the US market’s recent transition to T+1 settlement, capital is often left idle overnight. According to executives, smart contracts and atomic payments on blockchain can break down these cost structures, enabling instantaneous on-chain finality. He added that the margins captured by existing intermediaries represent an opportunity for new entrants to build the basic infrastructure.

Regulatory clarity was identified as another key driver. Executives noted that the momentum of reforms like the CLARITY Act could fuel mainstream adoption of tokenized financial markets in a similar way to previous stablecoin legislation. He emphasized that fast-moving institutions are unlikely to build middleware, compliance tools, or cross-border deployment systems themselves, instead positioning themselves as customers of new infrastructure providers. Making a historical comparison, he cited the 1990s as an example, when exchanges provided the foundation but did not build platforms like E*TRADE or Bloomberg, which were created by independent founders who anticipated market needs.

A16z Crypto partners concluded that tokenization will lead to faster transaction speeds, lower friction, increased liquidity, and a larger market. He urged builders and entrepreneurs to take advantage of the opportunity to develop the underlying infrastructure for emerging tokenized financial systems while the market window remains open.

As MPost’s resident journalist, Alisa specializes in the broad areas of cryptocurrencies, zero-knowledge proofs, investing, and Web3. With a keen eye for new trends and technologies, she provides comprehensive coverage to inform and engage readers about the ever-evolving digital financial landscape.

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