SEC Chair predicts 2-year timeline to put US fully on chain but the real $12.6 trillion opportunity isn’t equities
SEC Chair Paul Atkins advised Fox Business in December that he expects US monetary markets to transfer on-chain “in a few years.” The assertion landed someplace between prophecy and coverage directive, particularly coming from the architect of “Project Crypto,” the Commission’s formal initiative to allow tokenized market infrastructure.
However, what does “on-chain” imply when utilized to $67.7 trillion in public equities, $30.3 trillion in Treasuries, and $12.6 trillion in every 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 in the center layers, not the DeFi-native endpoints that crypto Twitter imagines.
Four 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, but the plumbing stays conventional. Think digitized share certificates. Atkins explicitly frames tokenization as sensible contracts representing securities that stay topic to SEC guidelines, moderately than as parallel asset lessons.
Layer two is record-of-entitlement and switch: the “who owns what” ledger strikes through blockchain, but settlement nonetheless occurs by incumbent clearinghouses. DTCC’s Dec. 11 no-action letter from the SEC Trading & Markets authorizes precisely this mannequin.
The Depository Trust Company can now problem “Tokenized Entitlements” to members through accredited blockchains. However, 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 foreign money. Atkins mentioned DvP and the theoretical possibility of T+0, but he additionally acknowledged that netting is the core of clearinghouse design.
Real-time gross settlement modifications liquidity wants, margin fashions, and intraday credit score strains. That’s tougher 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 sensible contracts. This is the last state that touches governance, authorized finality, tax therapy, and switch restrictions.
It’s additionally 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 gigantic, 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 at the end of 2025, per SIFMA. Trading depth averaged 17.6 billion shares per day in 2025, with an estimated common every 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 every day buying and selling worth equals $4 billion in gross settlement throughput per day, assuming blockchain might eradicate the netting that presently collapses billions in trades into far smaller web obligations.
Treasuries are larger by stream. The market stands at $30.3 trillion in excellent quantity as of the third quarter of 2025, with a mean every day buying and selling quantity of $1.047 trillion.
Yet the real monster is repo: the Office of Financial Research estimates common every day repo exposures of $12.6 trillion in the third quarter of 2025, spanning cleared, tri-party, and bilateral preparations.
If tokenization’s pitch is de-risking settlement and enhancing collateral mobility, repo is the place the argument turns into legible. Two % of every day repo publicity is $252 billion, a believable early wedge if establishments see operational and transparency wins.
Corporate credit score and securitized merchandise add one other dimension.
Corporate bonds excellent whole $11.5 trillion, with a mean every day buying and selling quantity of $27.6 billion. Agency mortgage-backed securities traded $351.2 billion per day in 2025, whereas non-agency MBS and asset-backed securities mixed for one more $3.74 billion every day.
Total fixed-income buying and selling hit $1.478 trillion per day in 2025. These markets already function by custody chains and clearing infrastructure that tokenization might streamline with out regulatory surgical procedure.
Fund shares symbolize a distinct entry level. Money market funds maintain $7.8 trillion in property 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 at the product wrapper layer. Franklin Templeton’s FOBXX positions itself as an on-chain cash fund, BlackRock’s BUIDL reached nearly $3 billion in assets last year.
Tokenized Treasuries tracked by RWA.xyz total $9.25 billion, making them a number one on-chain real-world asset class.
Real property splits into two classes. Owner-occupied US housing carried a market value of $46.09 trillion in the third quarter of 2025. Still, county deed registries will not tokenize at scale in two years, as property legislation and administrative actuality transfer slower than software program.
The financialized slice, consisting of REITs, mortgage securities, and securitized real property publicity, already lives in the securities plumbing and might transfer earlier.
What strikes first: a ladder of regulatory friction
Not all on-chain adoption faces the identical stage of resistance. The path 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 symbolize significant scale relative to different real-world property on-chain. If distribution expands by broker-dealer and custody channels, a five-to-twenty-times enlargement 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 every day footprint makes it the most credible goal for tokenization’s delivery-versus-payment pitch.
Even if 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 danger and operational overhead.
The subsequent 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 accredited blockchains.
If members deal with this as a stability sheet and operations improve, resembling 24/7 motion, programmable switch logic, and higher transparency, 0.1% to 1% of the US fairness market cap might grow to be “on-chain eligible entitlements” inside two years. That’s $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. Moving 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.
Private credit score and personal markets carry a substantial notional worth, with estimates starting from $1.7 trillion to $2.28 trillion. Yet, switch restrictions, servicing complexity, and bespoke deal phrases make them slower to standardize.
Tokenization helps with fractional possession and secondary liquidity, but regulatory readability round exemptions and custody fashions nonetheless lags.
Real-world registries rank final. Tokenizing a property deed would not exempt it from native recording statutes or title insurance coverage necessities. Even if the monetary publicity strikes on-chain by securitization, the authorized infrastructure supporting possession claims will not.
Smaller than the hype, bigger than zero
Most tokenized securities will probably be on-chain but not open to the public.
DTCC’s pilot mannequin is permissioned even on public blockchains, with registered wallets, allowlisted members, and institutional custody. That’s nonetheless “on-chain” in the transparency and operational effectivity sense Atkins described. It’s 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 visible example.
Stablecoins present the bridging layer, with a $308 billion supply, serving as the on-chain settlement asset base that makes delivery-versus-payment believable with out a wholesale CBDC. Before shares go on-chain, {dollars} did.
A concrete approach to dimension this: utilizing tokenized money merchandise as the beginning numerator, making use of haircuts for switch restrictions and custody fashions, and estimating the fraction that may work together with sensible 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 sensible contracts, that means $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 apply
Atkins did not supply an in depth roadmap, but 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 offers an on-chain money layer. Repo markets dwarf equities by every day stream, and collateral mobility is the place tokenization’s risk-reduction argument is strongest.
The two-year timeline is not about each safety transferring to Ethereum. It’s about vital mass in the center layers: layer two entitlements that reside on-chain but settle by acquainted infrastructure, and layer three experiments the place delivery-versus-payment occurs on-chain for particular asset lessons 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.
This is a worldwide market-infrastructure modernization cycle, not a speculative overhang.
DTCC’s quarterly metrics on tokenized entitlements, resembling whole worth, every day transfers, registered wallets, and accredited chains, are helpful for monitoring.
The identical applies to repo transparency information from the Office of Financial Research, tokenized Treasury and cash market fund property below administration, and stablecoin provide as a proxy for settlement capability.
Those numbers will present whether or not “on-chain in a few years” was coverage or aspiration.
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