SEC Chairman Releases "Two-Year Prediction": Will US Financial Markets Fully Adopt Blockchain Technology?

Written by: Liang Yu

Editor: Zhao Yidan

On December 7, 2025, Paul S. Atkins, the chairman of the U.S. Securities and Exchange Commission (SEC), made a prediction that caught high attention in the market during an interview with Fox Business News. He pointed out that the blockchain technology that underpins cryptocurrencies such as Bitcoin may be widely adopted by the entire U.S. financial market in the next two years, driven by digital assets, market digitization and tokenization. Atkins believes that tokenization — the use of blockchain-based digital tokens to represent stocks and various assets — will be the next trend, promising significant benefits in terms of transparency and risk management for the financial system.

This forward-looking judgment from the top level of regulation quickly became the focus of heated discussions in the global financial and technology community. Is the SEC chairman’s “two-year outlook” a rational prediction based on industry trends, or an overly optimistic policy statement? If this prediction points to some possible technological evolution, what will be the path to implementation? What are the unavoidable structural challenges that will be faced? This article will try to dissect the logic behind this prediction and the far-reaching discussions it may trigger based on facts and figures.

1. Core drivers: intertwined with evolving efficiency, regulation and liquidity needs

If the U.S. financial market migrates to blockchain architecture, its fundamental driving force comes from the huge tension formed between the inherent problems of the traditional financial system and the enabling potential of new technologies. The three driving forces of efficiency revolution, regulatory desire, and liquidity release are intertwined and together constitute the underlying logic of migration.

The primary driving force is the pursuit of ultimate efficiency and cost reduction. The clearing and settlement system of traditional financial markets relies on complex reconciliation and manual operations between a large number of intermediaries, which is slow and costly. Near-real-time settlement and automated processes through smart contracts brought about by blockchain technology can greatly reduce transaction cycles and significantly reduce intermediary fees.

Efficiency gains are directly driving regulatory demands for transparency and risk management. The 2008 financial crisis exposed the opacity and regulatory lag of the financial system. The natural immutability and full traceability of blockchain technology can provide regulators with the “God’s perspective” that they dream of. All transactions are recorded on a shared ledger, and asset flows and ownership changes are clearly visible, providing an unprecedented tool for implementing penetrating supervision and real-time monitoring of systemic risks.

The combination of efficiency improvement and regulatory transparency has further released a third force - revitalizing the liquidity of huge “dormant assets”. Globally, a large number of assets such as private equity, real estate, private credit, etc. cannot be widely traded due to high thresholds, complicated procedures, and poor liquidity. By splitting large assets into small, standardized digital equity, tokenization can significantly lower the investment threshold and attract global long-tail funds. The positive feedback loop between these three forms the core endogenous driving force for the market’s migration to more efficient and transparent architectures.

2. Migration path outlook: the complex transition from asset on-chain to ecological reconstruction

The realization path of “migrating the entire financial market to blockchain” is more likely to be presented as a gradual “two-step” blueprint from local to whole, from basic to ecology. The two phases are fraught with complex transitions of technology, law, and market integration.

The first stage is the full tokenization of the asset layer. There is a clear threshold for successful tokenization practices. Assets with relatively stable value, clear legal ownership, and reliable verifiable off-chain status will become the pioneers of migration. Therefore, the migration starts with the asset classes that best meet these conditions: first of all, top credit assets such as U.S. Treasury bonds and money market funds, such as U.S. Treasury bonds, have become the first choice for institutions to test the waters due to their national credit endorsement and relatively stable prices. Then there are high-quality corporate bonds and credit assets, and then gradually expand to real estate income rights, commodities, etc.

When high-quality assets begin to exist widely in token form, it naturally transitions to a more challenging second phase: on-chain restructuring 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 liquidity? At present, two models may emerge: first, existing mainstream exchanges carry out in-depth technological transformation to enable their systems to natively accept, trade, and settle on-chain assets. This process faces significant challenges, including refactoring the core transaction engine to accommodate the asynchronous settlement characteristics of blockchain, developing compliant interfaces to interact with on-chain smart contracts, and rebuilding data pipelines with custody and clearing institutions. The second is the emergence of a new alternative trading system based entirely on blockchain architecture.

The profound contradiction exposed by this transitional phase lies in interoperability. Existing financial infrastructure is highly centralized and closed, and the ideal blockchain ecosystem advocates openness and composability. How can assets issued on private chains or specific consortium chains flow safely and compliantly in the broader public chain ecosystem? Eventually, we may see a hybrid financial ecosystem: the underlying is compliant and credible asset tokens; The middle tier is a regulated on-chain trading platform and an audited DeFi protocol; The upper level is rich in financial innovation applications. The construction of this ecosystem is not only the realization of technology, but also the overall migration of legal frameworks, regulatory consensus and market participants’ habits.

3. Severe challenges: the triangular game and specific dilemmas of technology, regulation and interests

Any prediction of a full migration in the short term must face multiple serious and specific challenges. Technical feasibility, regulatory frameworks, and established interest patterns form a solid “impossible triangle.”

Technology scalability and maturity are the first hurdles. The current annual trading volume of the U.S. Treasury bond market is as high as trillions of dollars, and the daily trading volume of the global financial market is even more astronomical. Although existing mainstream public chains have made great progress through scaling solutions, they still face challenges in terms of throughput, transaction finality, and network fees in extreme cases when supporting high-frequency, large-value transactions of this scale. What’s more, financial-grade applications require nearly 100% security and stability, and security incidents such as smart contract vulnerabilities and cross-chain bridge attacks are common, highlighting the rigorous tempering of technology infrastructure before it matures.

The fragmentation and uncertainty of the regulatory framework are the biggest soft constraints. The current global regulation of tokenized assets is in a “blurred area”. In the United States, the SEC and CFTC have a long-standing jurisdictional dispute over whether certain digital assets are “securities” or “commodities”, leading to compliance difficulties for project parties. The core challenge of regulation lies in the methodology: how to efficiently and non-destructively embed effective rules such as “know your customer”, anti-money laundering, and investor suitability management in traditional finance into a decentralized or semi-centralized on-chain environment in the form of “regulation as code”.

The path dependence and restructuring resistance of the traditional interest pattern are deep-seated social challenges. The essence of blockchain migration in the financial market is a reorganization of production relations, which is bound to touch the business model and profit center of existing intermediaries. At the same time, the entire financial industry has invested huge sunk costs in existing systems, including customized software systems, long-trained professional teams and mature internal risk control processes. Switching to a completely new paradigm means extremely high conversion costs, learning curves, and unknown operational risks, which constitute strong institutional inertia.

4. Conclusion: An irreversible but doomed gradual revolution

Back to SEC Chairman Paul Atkins’ hotly debated “two-year outlook”. Considering the practical constraints of technology, regulation, and interests, achieving the blockchain migration of “the entire U.S. financial market” within two years is an almost impossible operational challenge. However, the real value of this prophecy lies in the fact that it sends a clear strategic signal from the perspective of a key regulator: the underlying technology paradigm shift in the financial market has risen from a marginal technological experiment to one of the future options for serious thinking at the top regulators, and has been given an urgent time expectation.

This change is more likely to take on the form of a gradual, integrated, and long revolution full of trial and error. In the next two years, we may see that the asset classes and scale of high-quality RWAs such as tokenized treasury bonds and private equity funds continue to expand; Mainstream financial institutions have applied blockchain technology to the background clearing and settlement process more extensively. In the regulatory sandbox of major financial centers, more limited-scope pilots involving the tokenization of core assets will be approved. and, breakthroughs in key federal legislation on digital assets.

At the same time, the different regulatory paths chosen by major economies such as China, the United States and Europe based on their respective political and economic structures, the current state of the financial system and risk tolerance provide a diverse “control group” for this global experiment. This diversification itself is also a source of risk diversification and resilience in the global financial system.

Ultimately, the essence of finance is the exchange of value and trust transmission across time and space. As a new “trust machine”, the historical mission of blockchain technology is not to simply replace existing systems, but to provide more efficient, transparent, and verifiable trust solutions for increasingly complex and globalized economic networks through cryptographic guarantees, distributed consensus, and programmability. No matter how many technical bottlenecks, regulatory gaps and interest games there are ahead of us, it is an irreversible trend for the financial system to evolve towards a higher degree of digitalization, intelligence and credibility. The destination of this migration may not be completely clear, but the journey has undoubtedly begun, and its path will be more tortuous, profound, and revelatory than the original prediction.

Sources of some of the information:

“U.S. SEC Chairman: The entire U.S. financial market may be moved to the chain within two years”

“The Latest Speech of the Chairman of the U.S. SEC: Reform Regulatory Rules such as IPO Information Disclosure to Revitalize the U.S. Capital Market”

“U.S. SEC Chairman: It is expected that all U.S. markets will be migrated to on-chain operation within the next 2 years”