On December 7, 2025, Paul S. Atkins, Chairman of the U.S. Securities and Exchange Commission (SEC), made a prediction that garnered significant market attention during an interview with Fox Business News. He pointed out that driven by digital assets, market digitization, and tokenization, the blockchain technology that underpins cryptocurrencies such as Bitcoin is likely to be widely adopted across the U.S. financial market within the next two years. Atkins believes that tokenization—the use of blockchain-based digital tokens to represent stocks and various assets—will be the next trend, potentially bringing significant benefits to the financial system in terms of transparency and risk management.
This forward-looking assessment from the top regulatory body has quickly become a hot topic of discussion in the global financial and technology sectors. Is the SEC Chairman's "two-year outlook" a rational prediction based on industry trends, or an overly optimistic policy declaration? If this prediction points to a possible technological evolution, what will its implementation path be? And what unavoidable structural challenges will it face? This article will attempt to analyze the logic behind this prediction and the profound discussions it may trigger, based on facts and data.
I. Core Driving Forces: The Intertwined Evolution of Efficiency, Regulation, and Liquidity Needs
The fundamental driving force behind the migration of the US financial market to a blockchain architecture stems from the immense tension between the inherent problems of the traditional financial system and the enabling potential of new technologies. The three driving forces—efficiency revolution, regulatory demands, and the release of liquidity—are intertwined, forming the underlying logic of this migration.
The primary driving force lies in the pursuit of ultimate efficiency and cost reduction. Traditional financial market clearing and settlement systems rely on complex reconciliation among numerous intermediaries and manual operations, a process that is slow and costly. Blockchain technology, with its near real-time settlement and automated processes enabled by smart contracts, can significantly shorten transaction cycles and substantially reduce intermediary fees.
Increased efficiency has directly driven regulatory demands for transparency and risk management. The 2008 financial crisis exposed the lack of transparency in the financial system and regulatory lag. Blockchain technology's inherent immutability and full traceability provide regulators with the long-desired "God's-eye view." All transactions are recorded on a shared ledger, making asset flows and ownership changes clearly visible. This provides an unprecedented tool for implementing penetrating regulation and real-time monitoring of systemic risks.
The combination of efficiency improvements and regulatory transparency has further unleashed a third force—activating the liquidity of massive "dormant assets." Globally, a large number of assets, such as private equity, real estate, and private credit, cannot be widely traded due to high barriers to entry, cumbersome procedures, and poor liquidity. Tokenization, by dividing large assets into small, standardized digital rights, can significantly lower investment barriers and attract global long-tail capital. The positive feedback loop formed by these three factors constitutes the core endogenous driving force for the market to migrate towards a more efficient and transparent architecture.
II. Migration Path Outlook: The Complex Transition from Asset On-Chain to Ecosystem Reconstruction
The path to migrating the entire financial market to blockchain is more likely to be a gradual two-step process, moving from the partial to the whole and from the foundation to the ecosystem. The transition between these two stages is complex, involving the integration of technology, law, and the market.
The first phase is the full tokenization of the asset layer. Successful tokenization practices have clear thresholds. Assets with relatively stable value, clear legal ownership, and reliably verifiable off-chain state will be the pioneers of the migration. Therefore, the migration begins with asset classes that best meet these conditions: first, top-tier credit assets such as US Treasury bonds and money market funds. For example, US Treasury bonds, due to their national credit backing and relatively stable prices, have become the first choice for institutions to test the waters. Then come high-quality corporate bonds and credit assets, and gradually expand to real estate income rights, commodities, and so on.
As high-quality assets begin to exist widely in token form, the natural transition leads to a more challenging second phase: the on-chain reconstruction of market infrastructure such as trading, settlement, and custody. The core question is: where and how will these on-chain assets be traded and managed for liquidity? Currently, two models are emerging: First, existing mainstream exchanges will undergo deep technological upgrades to enable their systems to natively accept, trade, and settle on-chain assets. This process faces significant challenges, including reconstructing core trading engines to adapt to the asynchronous settlement characteristics of blockchain, developing compliant interfaces for interaction with on-chain smart contracts, and rebuilding data pipelines with custody and clearing institutions. Second, entirely new alternative trading systems based entirely on blockchain architecture are emerging.
The profound contradiction exposed during this transition lies in interoperability. Existing financial infrastructure is highly centralized and closed, while an ideal blockchain ecosystem advocates openness and composability. How can assets issued on private chains or specific consortium chains flow securely and compliantly within a broader public blockchain ecosystem? Ultimately, we may see a hybrid financial ecosystem: the bottom layer consists of compliant and trustworthy asset tokens; the middle layer comprises regulated on-chain trading platforms and audited DeFi protocols; and the top layer features a wealth of innovative financial applications. Building this ecosystem is not merely a matter of technological implementation, but also a holistic migration of legal frameworks, regulatory consensus, and market participant habits.
III. Severe Challenges: The Triangular Game and Specific Dilemmas of Technology, Regulation, and Interests
Any prediction of a full migration in the short term must confront multiple serious and specific challenges. Technical feasibility, regulatory framework, and existing interest structures constitute a robust "Blockchain Trilemma."
Technological scalability and maturity are the most pressing hurdles. The US Treasury market currently sees annual trading volumes in the trillions of dollars, while global financial markets generate astronomical daily trading volumes. While existing mainstream public blockchains have made significant progress through scaling solutions, they still face challenges in terms of throughput, transaction finality, and network costs under extreme conditions when supporting such high-frequency, high-value transactions. More importantly, financial-grade applications require near-100% security and stability, and the frequent occurrence of security incidents such as smart contract vulnerabilities and cross-chain bridge attacks highlights the need for rigorous testing and refinement of technological infrastructure before it can mature.
The fragmentation and uncertainty of the regulatory framework are the biggest soft constraints. Currently, global regulation of tokenized assets is in a "gray area." In the United States, the SEC and CFTC have long disputed jurisdiction over whether certain digital assets should be classified as "securities" or "commodities," leading to compliance difficulties for project teams. The core challenge of regulation lies in methodology: how to efficiently and seamlessly embed effective rules from traditional finance, such as "know your customer," anti-money laundering, and investor suitability management, into decentralized or semi-centralized on-chain environments in the form of "regulation as code"?
The path dependence and resistance to restructuring within the traditional interest structure represent deep-seated social challenges. The blockchain migration to the financial market is essentially a restructuring of production relations, inevitably impacting the business models and profit centers of existing intermediaries. Simultaneously, the entire financial industry has already invested enormous sunk costs in the existing system, including customized software systems, extensively trained professional teams, and mature internal risk control processes. Switching to a completely new paradigm implies extremely high conversion costs, a learning curve, and unknown operational risks, which constitutes a strong institutional inertia.
IV. Conclusion: An Irreversible but Destined for a Tortuous Gradual Revolution
Returning to SEC Chairman Paul Atkins's much-discussed "two-year outlook," considering the practical constraints of technology, regulation, and vested interests, achieving a blockchain migration across the "entire" US financial market within two years is a near-impossible challenge in practice. However, the true value of this prediction lies in the clear strategic signal it sends from the perspective of a key regulator: the migration of the underlying technological paradigm in the financial market has risen from a fringe technological experiment to one of the future options seriously considered by top regulators, and has been given an urgent timeframe.
This transformation is more likely to take the form of a gradual, integrated, and protracted revolution, fraught with trial and error. Over the next two years, we may see substantial progress in the following areas: the continued expansion of the asset classes and scale of high-quality RWAs, such as tokenized government bonds and private equity funds; mainstream financial institutions applying blockchain technology more broadly to back-office clearing and settlement processes; the approval of more limited-scope pilot programs involving the tokenization of core assets in the regulatory sandboxes of major financial centers; and breakthroughs in key federal legislation concerning digital assets.
At the same time, the different regulatory paths chosen by major economies such as China, the US, and Europe, based on their respective political and economic structures, the current state of their financial systems, and their risk tolerance, provide a diverse "control group" for this global experiment. This diversification itself is also a source of risk dispersion and resilience for the global financial system.
Ultimately, the essence of finance is the exchange of value and the transfer of trust across time and space. As a novel "trust machine," blockchain technology's historical mission is not simply to replace existing systems, but to provide more efficient, transparent, and verifiable trust solutions for the increasingly complex and globalized economic network through cryptographic guarantees, distributed consensus, and programmability. Regardless of the technological bottlenecks, regulatory gaps, and power struggles ahead, the evolution of the financial system towards a higher degree of digitalization, intelligence, and trustworthiness is an irreversible trend. The destination of this migration may not yet be fully clear, but the journey has undoubtedly begun, and its path will be more tortuous, profound, and enlightening than initially predicted.
Some of the information comes from the following sources:
• US SEC Chairman: The entire US financial market may migrate to blockchain within two years.
• Latest speech by the Chairman of the U.S. Securities and Exchange Commission: Reforming IPO disclosure and other regulatory rules to revitalize the U.S. capital markets
• US SEC Chairman: All US markets are expected to migrate to blockchain within the next two years.
Author: Liang Yu; Editor: Zhao Yidan
