"Disrupting Wall Street" Story Exits, Crypto Sector Shifts to Financial Underlying Infrastructure

By: Prathik Desai

Compiled by: Luffy, Foresight News

Last year, an institution processed securities transaction settlements totaling 4.7 quadrillion USD, a figure exceeding 35 times the global GDP. Just this month, this institution — the Depository Trust & Clearing Corporation (DTCC) — officially enabled blockchain technology to process relevant transactions.

The core of the most important upgrade cycle in the global financial industry today is infrastructure iteration. Clearing institutions are not the only participants; cross-border messaging collaboration institutions connecting over 10,000 banks globally and card payment networks covering 200 million merchants are all reconstructing the underlying system of asset circulation, with blockchain becoming the core component of this upgrade.

Traditional industries that once long excluded the crypto sector are now accelerating the adoption of crypto asset underlying channels.

This article will analyze why traditional finance is accepting crypto infrastructure as a backend and the role crypto enterprises play in this industry transformation.

The Dilemma of High Costs

Microsoft stock you buy on the NYSE today nominally still requires a full trading day to complete the legal transfer of ownership. Tracing the root, this equity circulation infrastructure was born in the era of paper stock certificates. Humanity spent over 60 years achieving stock dematerialization and accelerating securities trading processes, but the link of fund and asset delivery still follows the underlying architecture designed in the paper era.

This cannot simply be viewed as a convenience issue. The delay in asset and fund transfers continuously generates explicit capital costs.

Taking cross-border bank payments as an example: Most global banks need to pre-deposit funds in accounts in different countries and currencies to ensure normal clearing of cross-time zone payments. Banks rely on local deposits and central bank reserves to complete cross-border settlements without waiting for business hours in various locations to transfer funds in real time.

Even the margin paid by securities traders generates no yield during idle periods. The clearing system stops operating on Friday evening and resumes on Monday; even if market participants continue trading activities over the weekend, the rules do not change. This mechanism was not intentionally designed to create inconvenience at its inception, but to this day, everyone is paying "implicit taxes" for old infrastructure, while more efficient, low-cost alternatives have emerged.

Major exchanges are responding by extending trading hours. The London Stock Exchange just announced the launch of the LSE 24 trading segment, achieving 23.5 hours of uninterrupted trading from Monday to Friday starting from the first half of 2027. CME launched 24/7 crypto futures in May. Nasdaq also plans to launch 23-hour daily trading services later this year.

Trading hours are continuously expanding, but trade clearing still lags behind. Capital continues to be occupied, further burdening traders.

The scale of implicit costs brought by this old system is huge, accounting for more than one-fifth of global GDP.

Last year alone, the total cross-border payments of global enterprises exceeded 30 trillion USD, with annual transaction costs exceeding 120 billion USD.

Traditional financial infrastructure operators are finally starting to face this cost issue. In July 2026, the industry took a substantive step, attempting to replace old systems with crypto asset underlying channels.

Infrastructure Replacement

On July 15, DTCC, a core pillar of the US financial market, completed the first batch of tokenized securities live transactions. The trading targets were tokenized assets corresponding to listed company stocks, US Treasury bonds, and ETFs.

In DTCC's first round of on-chain transactions, JPMorgan tokenized one of the most liquid ETFs globally — Invesco QQQ Trust, and submitted it as margin to CME. Over 30 institutions including Goldman Sachs, BlackRock, Vanguard, and NYSE participated in this test. These tokens completed repo transactions, asset pledging, securities lending, and clearing margin circulation in a production environment.

There are only a few months left until DTCC plans to officially launch tokenization services in October 2026.

This infrastructure upgrade intuitively demonstrates how much economic benefit an efficient system can create for the capital market. In May 2024, the US stock market settlement cycle was shortened from T+2 to T+1. Just one day of compression reduced the margin scale required by clearing participants by 3 billion USD, a decrease of 23%; the margin scale dropped from a three-month average of 12.8 billion USD under the T+2 cycle to 9.8 billion USD.

Shortening the settlement cycle by one day in a single country's stock market can release 3 billion USD in idle margin. If cross-border settlements for categories such as stocks, US Treasuries, repos, and foreign exchange can be compressed to completion in a few minutes and break weekend time restrictions, the released capital value will grow exponentially.

This is exactly the value that blockchain can standardize. Stablecoin transfers can be completed in a few seconds, with fees of only a few cents, 365 days a year. Tokenized securities can change ownership in real time and simultaneously serve as pledged collateral without waiting for the system to open on Monday.

This is the core reason why traditional infrastructure operators are willing to accept crypto underlying channels as a backend. If they stick to the old system, competitors can seize customer resources with lower costs and faster speeds.

Crypto infrastructure eliminates fund idle windows, helping client capital operate with higher efficiency. Securities that can only be settled tomorrow cannot be used as collateral today; tokenized securities can complete pledging and lending within minutes around the clock. Whether collateral can circulate freely determines whether capital functions intermittently or continuously creates yield.

Just 9 days before the DTCC test, SWIFT, the cross-border messaging system connecting over 11,500 financial institutions globally, announced that 17 banks from six continents (including Citibank, HSBC, UBS, Standard Chartered, MUFG) will soon pilot tokenized deposits on a brand new shared ledger.

Tokenized deposits belong to bank money and are not constrained by business hours. Blockchain supports normal fund circulation at night and on weekends, while asset rights still belong to licensed banks. For institutions worried that bank-issued stablecoins lack Federal Deposit Insurance Corporation (FDIC) protection, this is an ideal alternative. Tokenized deposits combine the convenience of stablecoins while assets operate within the existing regulatory framework.

Even card organizations like Visa are beginning to layout crypto infrastructure.

On July 16, Cuy Sheffield, Head of Visa Crypto Lab, announced the launch of a new platform allowing banks to issue, circulate, and redeem stablecoins within existing fund management systems. The platform shields customers from complex technical details such as private keys, Gas fees, and underlying public chains.

The biggest attraction for traditional financial giants embracing crypto infrastructure as a backend is that they can rely on their vast distribution networks to convey time and cost advantages to end customers. The Visa network already covers approximately 15,000 financial institutions and over 200 million merchants.

Visa's competitor Mastercard is continuously expanding based on earlier pilots and small-scale implementations, expanding stablecoin settlement options for partner banks, supporting 6 regulated stablecoins: USDC issued by Circle, Paxos's PYUSD, USDG, USDP, Ripple's RLUSD, and SoFiUSD launched by SoFi. These stablecoins will support multiple mainstream public chains, including Arbitrum, Base, Canton, Ethereum, Polygon, Solana, Tempo, and XRPL.

Large-scale implementation cases have already emerged within banks confirming that this infrastructure possesses commercial carrying capacity. JPMorgan Kinexys has cumulatively processed transaction volumes exceeding 4 trillion USD, with daily average transfer scales over 7 billion USD, operating normally even on holidays when traditional financial markets are closed.

Practitioners who remain skeptical about crypto infrastructure can refer to blockchain implementation cases of money market funds. BlackRock's tokenized Treasury fund BUIDL has a management scale of about 2.5 billion USD and is now accepted as margin collateral by major derivatives trading venues; Standard Chartered Group and crypto trading platform OKX collaborated to build this operating framework.

This is exactly the real value of crypto infrastructure as a backend; while assets serve as margin, they can still earn US Treasury yield.

If someone asks why the industry needs to adopt crypto asset channels, the above is the most powerful answer.

The most important mission of any financial innovation is to make the circulation, appreciation, and storage of funds more efficient.

Many established crypto enterprises have found new industry positioning relying on this kind of innovation.

From Confrontation to Cooperation: Crypto Enterprises Transform into Service Providers

Many crypto native concept supporters once envisioned that the crypto industry would completely replace traditional financial institutions. Reality is heading in a completely different direction; crypto enterprises are transforming into infrastructure builders needed by traditional finance.

Multiple crypto enterprises collaborated to facilitate the landing of this on-chain transaction by DTCC in July. Chainlink is responsible for connecting various networks; Digital Asset's Canton network carries US Treasury token circulation; Fireblocks and BitGo provide custody services; Circle and Ondo designed supporting service solutions for the entire working group.

These enterprises spent ten years building a parallel financial system, now turning to assist traditional financial institutions in building lower-cost, faster asset circulation infrastructure. The profit model has completely changed: no longer attempting to replace Wall Street, but charging technical service fees to Wall Street institutions.

Such cooperation layouts are spread across the globe. On July 16, the world's largest stock token issuer Ondo Finance announced a partnership with Japan's SBI Group to promote Japanese stock tokenization. Tokenized equity will access the SBI ecosystem, relying on SBI-issued JPY stablecoin JPYSC to complete settlement.

SBI manages assets exceeding 250 billion USD. If developing tokenization technology from scratch, R&D costs are extremely high. Enterprises choose to directly purchase mature blockchain technology and pay technical fees to service providers. Currently, Ondo occupies more than 70% share of the equity token issuance market, while establishing distribution cooperation with Clearstream under European Deutsche Börse. Securitize also plays the role of a technical service provider, supporting the issuance of BlackRock's BUIDL fund.

Future Direction of the Industry

The transformation of the logistics industry can serve as a reference. In 1956, truck driver Malcom McLean invented the standard shipping container. Cargo loading and unloading costs dropped from $5.86 per ton to $0.16, and global trade was reconstructed around containers. Ironically, shipping companies hardly shared much of the dividends from this. Containers ultimately became standardized general commodities, and the shipping industry fell into price wars; those who truly harvested the dividends were enterprises that reconstructed business models around low-cost stable shipping. The biggest beneficiary of container innovation was retail giant Walmart, not logistics giant Maersk.

The fintech field may replicate a similar script.

For containers to reshape the logistics industry, docks, cranes, freight chassis, and customs systems all needed supporting modifications. Similarly, for tokenization to become popular, custody, compliance, and cross-chain interoperability systems must be built simultaneously. As the bank settlement layer gradually moves towards standardization, value will converge towards the supporting ecosystem, which is exactly the track Chainlink, Fireblocks, and Digital Asset are targeting.

Tokens themselves and underlying public chains will find it difficult to continuously capture large amounts of value; returns will concentrate in two major directions.

The first category is platform institutions accessing crypto underlying channels. DTCC, SWIFT, and Visa will charge service fees for tokenized settlement, token deposits, and stablecoin business, consistent with the traditional model. But greater value space lies elsewhere; some institutions are reconstructing fund management systems around 24/7 atomic settlement, carrying out intraday fund scheduling, improving collateral utilization efficiency, and providing uninterrupted working capital services to the market. The BUIDL fund is a typical case, where assets continuously earn US Treasury interest while serving as margin.

The crypto industry has spent 15 years building a parallel financial system with superior performance. Visionary crypto builders should stop repeatedly building similar end-user financial products. The greater victory for the crypto track is to become behind-the-scenes infrastructure, making fund circulation costs lower and speeds faster.