SEC Chair Paul Atkins advised Fox Enterprise in December that he expects US monetary markets to maneuver on-chain “in a few years.” The assertion landed someplace between prophecy and coverage directive, particularly coming from the architect of “Undertaking Crypto,” the Fee’s formal initiative to allow tokenized market infrastructure.
Nevertheless, what does “on-chain” imply when utilized to $67.7 trillion in public equities, $30.3 trillion in Treasuries, and $12.6 trillion in each day repo exposures? And which elements can realistically transfer first?
The reply requires precision. “On-chain” is not a single factor: it’s a four-layer stack, and most of what Atkins described sits within the center layers, not the DeFi-native endpoints that crypto Twitter imagines.
4 flavors of on-chain
The hole between tokenized wrappers and full lifecycle automation determines what’s believable in two years versus 20 years, so definition issues.
Layer one is issuance and illustration: a token stands in for an underlying safety, however the plumbing stays conventional. Suppose digitized share certificates. Atkins explicitly frames tokenization as good contracts representing securities that stay topic to SEC guidelines, fairly than as parallel asset courses.
Layer two is record-of-entitlement and switch: the “who owns what” ledger strikes through blockchain, however settlement nonetheless occurs by means of incumbent clearinghouses. DTCC’s Dec. 11 no-action letter from the SEC Buying and selling & Markets authorizes precisely this mannequin.
The Depository Belief Firm can now problem “Tokenized Entitlements” to contributors through accepted blockchains. Nevertheless, the supply applies solely to registered wallets. Cede & Co. stays the authorized proprietor, and no preliminary collateral or settlement worth is assigned.
Translation: on-chain custody and 24/7 switch with out changing NSCC netting tomorrow.
Layer three requires on-chain settlement with an on-chain money leg, consisting of delivery-versus-payment utilizing stablecoins, tokenized deposits, or wholesale central financial institution digital forex. Atkins mentioned DvP and the theoretical chance of T+0, however he additionally acknowledged that netting is the core of clearinghouse design.
Actual-time gross settlement modifications liquidity wants, margin fashions, and intraday credit score traces. That is more durable than a software program improve.
Layer 4 is a full lifecycle on-chain answer that covers company actions, voting, disclosures, collateral posting, and margin calls, executed through good contracts. That is the ultimate state that touches governance, authorized finality, tax remedy, and switch restrictions.
It is also the furthest from present SEC authority and market-structure incentives.
Atkins’ two-year timeline maps most cleanly to layers two and three, not a wholesale migration to composable DeFi markets.
Sizing the addressable universe
The prize is big, even when adoption begins small, as a result of tiny percentages of big markets are big.
US public equities carried a market cap of $67.7 trillion on the finish of 2025, per SIFMA. Buying and selling depth averaged 17.6 billion shares per day in 2025, with an estimated common each day buying and selling worth of round $798 billion.
One % of the fairness market cap, transformed to tokenized entitlements, equals $677 billion. Half a % of each day buying and selling worth equals $4 billion in gross settlement throughput per day, assuming blockchain may get rid of the netting that presently collapses billions in trades into far smaller web obligations.
Treasuries are greater by move. The market stands at $30.3 trillion in excellent quantity as of the third quarter of 2025, with a median each day buying and selling quantity of $1.047 trillion.
But the actual monster is repo: the Workplace of Monetary Analysis estimates common each day repo exposures of $12.6 trillion within the third quarter of 2025, spanning cleared, tri-party, and bilateral preparations.
If tokenization’s pitch is de-risking settlement and bettering collateral mobility, repo is the place the argument turns into legible. Two % of each day repo publicity is $252 billion, a believable early wedge if establishments see operational and transparency wins.
Company credit score and securitized merchandise add one other dimension.
Company bonds excellent whole $11.5 trillion, with a median each day buying and selling quantity of $27.6 billion. Company mortgage-backed securities traded $351.2 billion per day in 2025, whereas non-agency MBS and asset-backed securities mixed for an additional $3.74 billion each day.
Whole fixed-income buying and selling hit $1.478 trillion per day in 2025. These markets already function by means of custody chains and clearing infrastructure that tokenization may streamline with out regulatory surgical procedure.
Fund shares signify a special entry level. Cash market funds maintain $7.8 trillion in belongings as of early January 2026. Mutual funds have $31.3 trillion, and ETFs maintain $13.17 trillion.
Tokenized fund shares do not require rearchitecting clearinghouses, as they sit on the product wrapper layer. Franklin Templeton’s FOBXX positions itself as an on-chain cash fund, BlackRock’s BUIDL reached practically $3 billion in belongings final yr.
Tokenized Treasuries tracked by RWA.xyz whole $9.25 billion, making them a number one on-chain real-world asset class.
Actual property splits into two classes. Proprietor-occupied US housing carried a market worth of $46.09 trillion within the third quarter of 2025. Nonetheless, county deed registries will not tokenize at scale in two years, as property regulation and administrative actuality transfer slower than software program.
The financialized slice, consisting of REITs, mortgage securities, and securitized actual property publicity, already lives within the securities plumbing and may transfer earlier.
What strikes first: a ladder of regulatory friction
Not all on-chain adoption faces the identical degree of resistance. The trail of least friction begins with merchandise that behave like money and ends with registries embedded in native authorities administration.
Tokenized money merchandise and short-dated payments are already taking place.
Tokenized Treasuries at $9.25 billion signify significant scale relative to different real-world belongings on-chain. If distribution expands by means of broker-dealer and custody channels, a five-to-twenty-times growth over two years, from $40 billion to $180 billion, turns into believable, particularly as stablecoin settlement infrastructure matures.
Collateral mobility follows shut behind. Repo’s $12.6 trillion each day footprint makes it essentially the most credible goal for tokenization’s delivery-versus-payment pitch.
Even when solely 0.5% to 2% of repo exposures shift to on-chain illustration, that is $63 billion to $252 billion in transactions the place tokenized collateral reduces settlement threat and operational overhead.
The following step is permissioned switch of mainstream securities entitlements.
DTCC’s pilot authorizes tokenized entitlements for Russell 1000 equities, Treasuries, and major-index ETFs, held through registered wallets on accepted blockchains.
If contributors deal with this as a stability sheet and operations improve, akin to 24/7 motion, programmable switch logic, and higher transparency, 0.1% to 1% of the US fairness market cap may grow to be “on-chain eligible entitlements” inside two years. That is $67.7 billion to $677 billion in tokenized claims, even earlier than settlement worth will get assigned.
Equities settlement and netting redesign sit increased on the friction ladder. Transferring to T+0 or real-time gross settlement modifications liquidity necessities, margin calculations, and intraday credit score publicity.
Central counterparty clearing exists as a result of netting reduces the amount of money that should transfer.
Eliminating netting means both discovering new sources of intraday liquidity or accepting that gross settlement applies solely to a subset of flows.
Non-public credit score and personal markets carry a substantial notional worth, with estimates starting from $1.7 trillion to $2.28 trillion. But, switch restrictions, servicing complexity, and bespoke deal phrases make them slower to standardize.
Tokenization helps with fractional possession and secondary liquidity, however regulatory readability round exemptions and custody fashions nonetheless lags.
Actual-world registries rank final. Tokenizing a property deed does not exempt it from native recording statutes or title insurance coverage necessities. Even when the monetary publicity strikes on-chain by means of securitization, the authorized infrastructure supporting possession claims will not.
Smaller than the hype, bigger than zero
Most tokenized securities might be on-chain however not open to the general public.
DTCC’s pilot mannequin is permissioned even on public blockchains, with registered wallets, allowlisted contributors, and institutional custody. That is nonetheless “on-chain” within the transparency and operational effectivity sense Atkins described. It is simply not “anybody can present liquidity.”
The DeFi-addressable wedge is largest the place the asset already behaves like money.
Tokenized payments and cash market fund shares are already collateral in crypto market infrastructure, and BlackRock’s BUIDL is a visual instance.
Stablecoins present the bridging layer, with a $308 billion provide, serving because the on-chain settlement asset base that makes delivery-versus-payment believable with out a wholesale CBDC. Earlier than shares go on-chain, {dollars} did.
A concrete solution to measurement this: utilizing tokenized money merchandise because the beginning numerator, making use of haircuts for switch restrictions and custody fashions, and estimating the fraction that may work together with good contracts.
If tokenized Treasuries and cash market fund merchandise attain $100 billion to $200 billion, and 20% to 50% will be posted into permissioned or semi-permissioned good contracts, that suggests $20 billion to $100 billion of believable on-chain collateral.
This is sufficient to matter for repo workflows, margin posting, and institutional DeFi.
What this implies in follow
Atkins did not supply an in depth roadmap, however the items are seen.
The SEC granted DTCC a no-action letter in December 2025 to pilot tokenized entitlements. Tokenized Treasuries and cash market funds are scaling. Stablecoin provide gives an on-chain money layer. Repo markets dwarf equities by each day move, and collateral mobility is the place tokenization’s risk-reduction argument is strongest.
The 2-year timeline is not about each safety shifting to Ethereum. It is about crucial mass within the center layers: layer two entitlements that stay on-chain however settle by means of acquainted infrastructure, and layer three experiments the place delivery-versus-payment occurs on-chain for particular asset courses and counterparties.
Even at 1% adoption throughout Treasuries, cash market funds, and equities entitlements, that is over a trillion {dollars} in on-chain illustration.
The US is not alone. The UK opened a Digital Securities Sandbox. Hong Kong issued HK$10 billion in digital inexperienced bonds. The EU’s DLT Pilot Regime establishes a framework for regulated experimentation in issuance, buying and selling, and settlement on distributed ledgers.
It is a world market-infrastructure modernization cycle, not a speculative overhang.
DTCC’s quarterly metrics on tokenized entitlements, akin to whole worth, each day transfers, registered wallets, and accepted chains, are helpful for monitoring.
The identical applies to repo transparency knowledge from the Workplace of Monetary Analysis, tokenized Treasury and cash market fund belongings underneath administration, and stablecoin provide as a proxy for settlement capability.
These numbers will present whether or not “on-chain in a few years” was coverage or aspiration.
