SEC Chairman Declares U.S. Markets Primed for On-Chain Transition

Wall Street's digital transformation just got its strongest regulatory nod yet.

The Infrastructure is Already Here

In a landmark shift, the SEC's top official suggests the foundational pieces for moving traditional securities onto blockchain ledgers are no longer theoretical. Market participants have quietly built the plumbing while regulators watched from the sidelines.

Cutting Out the Middlemen

On-chain systems bypass layers of custodians, clearinghouses, and transfer agents. Settlement slashes from days to minutes. The efficiency argument has officially moved from crypto evangelists to the head of the nation's top financial watchdog.

A Provocative New Reality

The statement reframes the debate. It's no longer about *if* major assets trade on-chain, but *when* and *how*. Legacy institutions now face a stark choice: lead the charge or get disintermediated. After all, what's a traditional bank but a very expensive, permissioned database with nicer furniture?

The race to rebuild finance on a digital backbone just left the starting gate. The old guard can either grab a wrench or become obsolete.

DTCC’s tokenization pilot

The DTCC announced its plan to tokenize a “set of highly liquid assets,” including the Russell 1000 index, major exchange-traded funds, U.S. Treasury bills, bonds, and notes. The service is expected to roll out in the second half of 2026. 

DTCC CEO Frank La Salla said, “Tokenizing the US securities market has the potential to yield transformational benefits such as collateral mobility, new trading modalities, 24/7 access, and programmable assets.”

The no-action letter permits DTCC to operate the tokenization service on pre-approved blockchains for three years. These tokenized assets will retain all rights, investor protections, and entitlements of their traditional counterparts. Hence, the pilot represents a controlled yet significant step toward modernizing U.S. market infrastructure.

Industry reactions

The announcement drew positive responses from market participants. X user Alexandre Lores praised the SEC’s constructive stance, noting that on-chain technology can strengthen both compliance and market performance. 

Another X user CLIF HIGH highlighted that the SEC’s innovation-first approach under Atkins positions the U.S. to lead globally, especially as jurisdictions like the EU and Singapore advance similar frameworks. 

Under your leadership since April, the SEC's pivot toward innovation-first regulation feels like a breath of fresh air after years of enforcement overhang. Prioritizing blockchain for real-world efficiency—think atomic settlements slashing T+1 risks or tokenized assets unlocking…

He added, “Prioritizing blockchain for real-world efficiency—think atomic settlements slashing T+1 risks or tokenized assets unlocking trillions in illiquid holdings—while keeping investor safeguards ironclad? That’s the sweet spot.”

SEC’s evolving stance on digital assets

Atkins told Fox Business that the SEC previously lagged behind market innovations but now embraces tokenization and digital assets. “It’s a new day now, and so we want to embrace this new technology, bring it onshore where it can work under American rules,” he said. He cited LedgerX as an example of regulatory clarity benefiting customers after the FTX collapse, demonstrating how proper rules can protect investors.

The SEC has issued no-action letters recently, which include Fuse crypto Limited for its energy-focused blockchain token in late November and to DoubleZero for its DePIN token program in late September. These letters signal that regulators now engage with innovators proactively, allowing them to build infrastructure without navigating burdensome legal uncertainties.

Implications for U.S. markets

On-chain markets promise to solve the delay issue that affects traditional markets. The investor greatly benefits from faster and more transparent systems. On the other side, issuers will receive more liquid capital.

Additionally, programmable assets may also make possible new forms of trade and collateral movement, thus altering the market structure. As a result, it becomes clear that DTC might open a gateway for blockchain adoption in mainstream finance.

The new method adopted by the SEC marks a shift in what constitutes market operations within U.S. markets. Tokenized securities could enable more efficient, transparent, and traceable markets while still taking I.P.O. considerations into account.

Also Read: CFTC Withdraws 2018 Retail Commodity Guidance on Crypto Assets