For the past four years, crypto has been the rebel alliance, while the SEC (Securities and Exchange Commission) has been the striking-back empire.
Almost every innovation in the crypto and Web3 space has been met with a subpoena. The message from Washington was clear: “Do not try this here.”
2025 is the year when the script was flipped.
The new SEC chair, Paul Atkins, waved the white flag in a candid interview (Dec 2025), saying the previous administration had put the US on the wrong side of history.
Let’s think about it. SEC claims that the history of making cryptocurrencies illegal has changed. We can’t even imagine this scene from last year (2024).
He then went on to say that US markets could move on-chain within the next few years.
While everyone is obsessing over AI hype, the world's financial plumbing is preparing for a complete overhaul in the very near future.
I am not saying AI is a bubble now, but it’s definitely a red ocean.
In this issue, I will dissect what it means to go on-chain and what that could mean for all of us.
If you haven’t read my previous article about why blockchain is as important as AI in the coming future, you may do so:
The limitation of the market
Currently, the US financial market (and the global market in general) doesn’t run on one single source of truth. Many people were surprised when I told them that.
It runs on a large number of isolated databases that have to send messages to each other to update their records.
Here are a few issues:
Reconciliation hell: Imagine this: we are playing a game of chess, but instead of having one single chessboard between us, we each have our own board in our own houses. Every time I moved a piece, I had to call you, and you had to update your board to match mine. This is literally what they are facing. Every bank, broker, and exchange keeps their own private ledger. They are spending billions of dollars to build reconciliation systems to make sure the records match in each other’s systems.
Latency: If you have purchased or sold a stock before, you would know this. Even though you can see the trade was successful in the app, the settlement always happens one day later (T+1). You can think of settlement as the real exchange of cash for ownership. Why is that the case? Because these ledgers are separate, moving value isn't instant. Between the trade and the settlement, the money is effectively "in the mail". This creates counterparty risk. What if the other bank goes bust during that one-day wait? To protect against this, banks have to lock up billions in "collateral" (security deposits) just in case. That’s "lazy capital" that can't be used for anything else!
Transparency: Because the data is split across thousands of private databases, nobody has a "God's eye view" of the market in real-time. Regulators and companies often see data that is days or weeks old. A company might not know who its shareholders are right now because the records are stuck in a clearinghouse web. This opacity allows bad actors to hide leverage and risk until it blows up (like in the 2008 crisis).
What does “On-Chain” actually mean?
Going on-chain simply means we are moving from the old ledger to a unified state machine. In the old world (I mean the current world), the “truth” was relative as the result of comparing two sets of data. After going on-chain, there’s only one ledger. It is shared, immutable, and cryptographically secured.
To understand the magnitude of this shift, we have to look at the very nature of what we “own.”
In the old world, a stock share is essentially an entry in a massive, centralized database at the DTCC (Depository Trust & Clearing Corporation, the largest entity that settles the vast majority of US securities transactions). You don’t truly hold the asset. Your broker has a claim to it. It is a system built on layers of promises.
Tokenization collapses these layers. It turns that database entry into a tangible digital object that lives directly in your wallet. It transforms a “claim” into a unique, transferable asset that you actually possess that can be moved as easily as an email but cannot be copied, only transferred.
Once these assets are on-chain, the ledger becomes a global computer. In the traditional system, a bond paying interest is a bureaucratic ordeal: imagine a back-office employee (or a dusty script) has to verify the date, calculate the amount, and initiate a wire transfer to payout. On-chain, the bond itself is code (the smart contract, more details in the future). It has logic embedded in its DNA. It simply “wakes up” on December 31st and executes: “If date equals today, send 5% USDC to the holder.”
No middleman, no delay, but with self-execution! How cool is that.
What’s the current state
If you want to know where the market is actually going, look at the infrastructure. The migration to on-chain rails has started to move past the experimental phase and into commercial deployment.
The first major shift is occurring in safe assets. Institutional giants are tokenizing their core products. BlackRock has effectively cornered the Treasury market with its BUIDL fund, which has grown to nearly $2.9 billion in assets as of late 2025. The utility here is strictly functional: it allows institutions to hold cash equivalents on-chain and use them as collateral without exiting the crypto ecosystem. We see a similar maturity at J.P. Morgan. Their blockchain unit (rebranded from “Onyx” to Kinexys to signal its transition to a core business line) is now processing roughly $2 billion in daily volume. This volume is driven mainly by intraday repo trades, a type of high-frequency settlement that legacy systems simply cannot handle!
While banks focus on the backend, fintech companies are rewiring the “frontend”. Visa recently expanded its stablecoin settlement capabilities to the US market, utilizing the Solana blockchain. The choice of Solana is notable here because it was a purely technical decision based on throughput and cost, validating high-performance chains for institutional use. At the same time, PayPal has integrated its stablecoin (PYUSD) into the creator economy. As of this month, YouTube creators in the US can opt to receive payouts directly in PYUSD. This integration effectively bypasses traditional banking rails for the end user, creating a closed-loop system where income is generated and settled digitally.
Finally, the bridge between the old and new worlds is officially open. The most critical update might be the least visible. SWIFT, which manages the messaging for 11,000 banks globally, has moved its integration with Chainlink’s CCIP (Cross-Chain Interoperability Protocol) into production as of November 2025. This allows banks to use their existing ISO 20022 messaging standards to interact with blockchain networks. It removes the need for banks to overhaul their legacy systems to access on-chain liquidity, solving the “last mile” problem of adoption.
There are more actions that I couldn’t cover in this issue, but feel free to do some research.
I am naturally drawn to where the complexity is highest, and the impact is deepest. AI is fun to write, but there is way too much information on AI out there.
Therefore, I think I will focus a lot more on Web3 / blockchain, at least on the following few issues, to give you guys a clear picture of what and how blockchain is shaping the value side of things in the world.
If you are obsessed with emerging tech, this is a blue ocean you should be looking at.
See you in the next one, cheers.