Wanxiang Blockchain chairman Xiao Feng said in a closing keynote at the 12th Blockchain Global Summit in Shanghai that tokenized financial assets, onchain finance, stablecoins and 24/7 trading should be viewed as a structural shift in market infrastructure rather than a simple wave of product innovation. In his telling, the change could alter the competitive rules among international financial centers and pull liquidity, capital and asset issuance toward markets that move first.
The next 10 years could bring bigger changes than previous decades
Xiao framed his speech around two lines of discussion: tokenized financial assets and 7×24 trading on one side, and the relationship between AI and blockchain on the other. He said the more important question is what happens when an international financial center decides to push tokenization at scale and run markets around the clock, and how rival centers should respond.
He pointed to the 12th US Treasury Market Conference held in New York on Sept. 22, US time, the day before his speech. Based on the information he cited, the event was jointly hosted by the US Treasury Department, the Federal Reserve, the New York Fed, the Securities and Exchange Commission and the Commodity Futures Trading Commission. Xiao said the CFTC chair spoke there about large-scale tokenization, onchain finance, 24×7 trading and stablecoins, and argued that these changes could have a bigger impact on the US financial system over the next decade than the changes seen over previous decades.
Xiao said that judgment matters because the US financial system has already gone through several major rounds of change. Over the past 20 years, information technology drove the rise of fintech. Before that, from the 1970s to before 2000, the US trading, clearing and settlement system went through another major overhaul.
He used the Depository Trust & Clearing Corporation, or DTCC, as an example. DTCC was established in 1999, but Xiao said it was not built from scratch. The US spent nearly 25 years absorbing and consolidating previously fragmented custody, registration and settlement institutions before arriving at a unified structure.
He then went back further. In the 1960s, US financial infrastructure at one point could not keep up with market growth. The New York Stock Exchange had to close every Wednesday, even though the market already traded Monday through Friday, because clearing could not keep pace. Stocks were still paper certificates. As volumes rose, those certificates had to be moved between clients at firms such as Goldman Sachs and Morgan Stanley, then reconciled, cleared and settled. Front-end trading moved faster than the back office could process, so the market had to stop and catch up.
Now, he said, Nasdaq is pushing toward a five-day, 23-hour trading schedule. The distance between a market that once had to shut every Wednesday to process paper stock and one that can trade 23 hours a day shows how much financial infrastructure has changed.
For Xiao, if the next decade brings changes larger than those seen over previous decades, then the issue is not the addition of a few new products to an existing system. It is the possibility that the market system itself changes again. That is why he grouped tokenization, onchain finance and continuous trading together.
A financial center is more than an exchange
Xiao said any discussion of market change has to start with the structure of the financial system. In theory, he broke it into five layers: the central bank at the top, then financial institutions, then the money market, the capital market and, finally, derivatives built on those spot markets.
At the top sits the central bank, which issues base money and acts as lender of last resort when financial institutions run into trouble or the macro environment is hit by a shock.
He referred to the period when US interest rates rose quickly and the price of Treasurys issued during the low-rate era fell. Many banks held large amounts of those assets and booked losses as a result. Xiao said he had cited a figure of nearly $600 billion in related losses. The Silicon Valley Bank episode then spilled into the stablecoin sector. Circle had more than $3 billion of USDC reserves at Silicon Valley Bank, he said, and if the case had been handled only under normal deposit insurance limits, the protected amount would have been very limited. US authorities later provided full protection for deposits at the failed banks involved.
His point was that once risk is no longer confined to a single institution and instead touches the macro environment and financial stability, system-level support becomes necessary.
He drew a parallel with 2008. Xiao said Goldman Sachs and Morgan Stanley applied to become bank holding companies in part because access to central bank liquidity mattered when Wall Street liquidity dried up. Institutions of that size needed to borrow and roll over tens of billions of dollars every day through interbank funding and repo markets. If they could not borrow, or if funding costs rose beyond what they could bear, they would run into trouble.
At that stage, he said, the issue was no longer how many CDOs a firm held or how large its paper losses were. The issue was that market liquidity itself had disappeared. That is why a financial center cannot be understood only through its exchanges and listed companies. The monetary and liquidity system behind it matters just as much.
Xiao said he once discussed whether the US financial center could move from New York to Silicon Valley because AI had become so strong there. His answer was no. What would need to move is not just the exchange. The harder part to move is the New York Fed and the infrastructure through which the Federal Reserve conducts open market operations. How dollar liquidity is injected and withdrawn depends on that system. Without moving that too, a place may have assets but not the corresponding funding system.
Below the central bank sit financial institutions. Xiao said the central bank issues base money, while banks and other financial institutions create money and credit under constraints, turning one unit of base funding into a larger amount of credit and financing capacity.
He used US Treasurys to illustrate the point. A financial institution may buy $100 of Treasurys, but that does not mean the money is locked up. The holder can pledge the bonds and borrow back a large portion of the funds. In the example he gave, $100 of Treasurys could be used to raise at least $95. That is credit creation, he said, and it is also a way to improve the efficiency with which assets are used.
Below that come the money market, the capital market and the derivatives market. Together, the five layers make up the financial market system. The changes under discussion today, Xiao said, could touch every layer rather than just one trading method for one asset class.
Four things a strong market has to solve at the same time
Xiao said a market’s efficiency and maturity can be judged through four dimensions.
- First is matching efficiency. Trades need to be completed quickly and counterparties need to be found in line with traders’ intentions. That requires a large enough pool of capital and deep enough liquidity. A fast matching engine alone does not guarantee fast execution if the market lacks enough money and participants.
- Second is settlement speed. Digital asset markets on blockchain stress the idea that trade and settlement happen together, or as close together as possible. That differs from traditional finance, where trading, clearing and settlement are separated. Xiao said digital asset markets can run continuously because their settlement design is different, while traditional securities markets face infrastructure constraints when they try to extend hours. If bank payment rails and settlement services do not run at night, on weekends and on public holidays, the trading front end cannot become a true round-the-clock market on its own. In his view, tokenized money and blockchain are key infrastructure for an efficient 24/7 settlement network.
- Third is sound credit creation. That means giving funds and assets a reasonable financing function and improving how efficiently they can be used. Can an asset serve as margin, collateral or a pledge? Can the holder continue to obtain financing without selling it? Xiao said investors usually want two things after buying a financial asset: the ability to sell when needed, and the ability to keep using the asset to obtain funding while still holding it.
- Fourth is deep liquidity. In the best case, what you see is what you get. The quoted price in the market should be close to the price at which you can actually trade. If an asset is marked at 100 yuan but selling it immediately costs 3%, the seller only gets 97 yuan. If market depth is strong enough, the trade may clear at 100 yuan or 99.99 yuan.
Matching, settlement, credit creation and liquidity need to be assessed together, he said. That is the full framework for evaluating market efficiency.
Onchain finance needs both tokenized money and tokenized assets
Xiao then stepped back and looked at accounting methods to explain why blockchain could matter so much. He said human civilization has gone through several major changes in bookkeeping. Early Sumerian civilization used clay tablets to record income and expenditure. Later, places such as Italy developed double-entry bookkeeping, which records not only receipts and payments but also assets and liabilities. Then in 2009, the Bitcoin blockchain appeared and distributed ledger technology entered practical use.
Xiao described blockchain as the third major innovation in bookkeeping. Because it changes the underlying method of recordkeeping, he said, it can affect the financial market system itself rather than just a front-end application.
Under blockchain-based infrastructure, financial market innovation is now moving in two directions: the money side and the asset side.
On the money side, he referred to central bank digital currencies, or CBDCs, tokenized bank deposits and privately issued stablecoins. Their issuers and legal nature differ, but from his perspective they all address the same question: how money can exist and circulate in tokenized form.
He spent extra time on stablecoins. Functionally, he said, he sees them as private digital cash. If someone withdraws 100 yuan in banknotes and puts the cash in a pocket, that money no longer needs a bank account in order to be handed to someone else. Stablecoins have a similar feature. Put them in a mobile wallet and they can be transferred directly to another party, much like cash in a pocket.
He highlighted three characteristics. First, cash does not pay interest to the holder, and the cash-like function of stablecoins discussed here is not about earning interest by holding them. Second, cash supports point-to-point payment. If someone buys a bottle of soy sauce in a store, hands cash to the merchant and receives the goods, payment and receipt are completed on the spot. There is no delay like a card payment where the merchant may not receive the money until the next day. Third, digital cash has the same kind of value. Xiao said people still need coins and banknotes in some situations today not because bank accounts are unimportant, but because cash has its own use cases. Stablecoins should be understood from that angle.
He added that bank deposits are bank money, central bank money has its own nature, and stablecoins have their own issuance and credit structure. The fact that all three can be used for payment does not make them identical.
On the asset side, he said bonds, funds, stock-related products and derivatives are all entering the tokenization process. The money side answers what is used for payment. The asset side answers what is being traded. Only when both sides can run on the same class of infrastructure can an onchain financial market form a closed loop. In his view, that is no longer just a concept. It is already happening.
If you do not tokenize, others may still help set the price of your assets
Xiao said the asset side raises a very practical issue: pricing power.
He noted that the Hong Kong government has already pushed bond tokenization on a scale of more than HK$70 billion. Fund tokenization and derivatives tokenization have also appeared.
He also cited a case that drew attention in his speech: ChangXin Memory and related trading on the offshore platform Hyperliquid. Based on the situation as he described it, related products were already trading on an offshore platform before the asset was formally listed onshore, and when the A-share market opened, prices on the two sides were very close.
That raises a question, he said. If an asset is listed onshore, does that necessarily mean its price must first be formed in the onshore market? Some people worry that pricing power over Chinese assets could shift overseas. That creates pressure: do you follow, and do you tokenize? If you do not, that does not mean others will not. If you do not participate, that does not mean the trading will not happen.
If offshore platforms keep adding such products and more trading happens there first, price discovery may begin there and then feed back into the domestic market. Xiao said that is both a source of pressure and a possible driver of change.
In the past, people often linked listing venue, trading venue and price formation together. But if the relevant economic exposure can trade earlier and more continuously on another platform, that link may weaken.
He also raised questions about regulatory jurisdiction and legal structure for such decentralized platforms. Traditional finance is used to understanding markets through jurisdictions, regulators and legal entities. New trading forms may not fit that framework neatly. If pricing power becomes more concentrated, market voice becomes more concentrated too. Other financial markets cannot avoid that challenge, he said.
Liquidity is the first thing a 24/7 market pulls in
Xiao said that when an international financial center is first to push tokenized financial assets at scale and launch 7×24 trading, the first impact on other centers is likely to be a loss of liquidity.
Whether the loss is 10% or 20%, the directional question is the same: will liquidity be drawn to the market that is easier to access and runs more continuously?
He said liquidity can be read through two main indicators: trading volume and market depth. Market depth determines the impact cost of buying and selling and whether bid-ask spreads are narrow or wide.
He used the US market as an example. The New York Stock Exchange and Nasdaq have regular trading sessions, but US stocks do not trade only during those hours. Pre-market and after-hours activity still takes place through ATS venues, or alternative trading systems, and other over-the-counter channels. Right now, that liquidity is spread across different systems.
If the main exchanges themselves move to continuous trading, some of that activity could return to the primary market and liquidity that is now fragmented across venues could gather again. Xiao said he believes that even during US nighttime hours, the volume after such aggregation could exceed the volume of some financial centers and exchanges in other countries.
Another change comes from global investors. In the past, an investor in Asia who wanted to trade US stocks might have had to wait until local midnight. If the market is open around the clock, that investor could trade during local daytime hours. That change in convenience affects investor choice.
So, in his view, 24/7 trading is not just about adding a few more hours. It could reorganize trading demand across time zones and locations. Other financial centers will feel the effect. The difference is how large the effect is and how much liquidity gets pulled away.
Liquidity draws capital, and capital draws issuance
From liquidity, Xiao moved to capital. He said traders naturally prefer markets with better and improving liquidity. If one market has 0.1% slippage and another has 2%, no trader will choose the more expensive venue on purpose.
Once liquidity gathers, capital follows. He used a Chinese phrase to describe it: when the water is deep, the fish grow large.
He then asked why the US can produce listed companies with market capitalizations of $5 trillion, and why private companies such as OpenAI and Anthropic can keep raising money at very high valuations before listing. In his speech, he used the valuation scale of $1 trillion to make a broader point about the carrying capacity of capital markets. The same company, even with the same earnings, can have different financing capacity and valuation in different capital markets because only a large enough pool of capital can support very large issuers.
In Xiao’s view, one important reason the US is pushing tokenization and round-the-clock trading is to prepare larger funding channels for future AI infrastructure. The US is entering a new infrastructure buildout cycle, from power systems to data centers. He said the funding demand involved over the next five years is on the order of $10 trillion.
That scale requires financing. A capital market that can face the world and operate 7×24 is clearly better positioned to gather funds for such infrastructure.
He extended the point to future AI companies. If an AI company eventually reaches a $10 trillion market capitalization, what size of capital market would be needed to support it? Xiao said he does not see a second market in the world that already has a funding base on the same scale as the US.
That does not mean the US does not need reform, he added. It does. Continuous trading is part of that reform because it opens the market further to global participation.
After capital comes issuers. If liquidity keeps improving and capital keeps growing, issuers will naturally choose to raise money in deeper pools. Liquidity attracts capital, capital attracts issuance, and more assets then attract more traders. The capital market that first builds a tokenized, 24/7 system could gradually become the center for global issuance, trading and settlement. Xiao described that as a self-reinforcing process.
A 24/7 financial supermarket still needs 24/7 settlement
From the investor’s perspective, Xiao said the logic is straightforward. If assets are tokenized and can trade around the clock, investors in other parts of the world can participate more easily.
In the past, investing in an overseas market often meant opening accounts, exchanging currency, making cross-border transfers and adapting to that market’s trading hours. If stablecoins can serve as the trading medium and settlement tool, some of those steps could become more direct.
He said that while in Hong Kong during daytime, he could in principle trade US assets instead of waiting until midnight. Investors in different regions could also use the same settlement instrument.
Xiao said tokenized trading plans related to the New York Stock Exchange already include the idea of using stablecoins for trading and settlement. He then asked what would happen if the US became a 24/7 financial supermarket.
In his description, that supermarket would have a full range of products, reasonable prices and enough market depth. Innovative products not yet available elsewhere would already be on the shelf there. If such a supermarket existed, would investors stay away? But extending opening hours is not enough. Settlement has to work around the clock too.
He recalled earlier attempts to build a global trading system by buying an Asian exchange, a European exchange and a US exchange in the hope of connecting three time zones. Those efforts were not easy to make work. The products traded were different, the settlement currencies were different and the banking systems involved were different. Hong Kong stocks settle in Hong Kong dollars, European assets in euros and US assets in dollars. Putting exchange ownership under one roof does not unify the circulation system for money and assets.
Now, he said, stablecoins, tokenized bank deposits and central bank digital currencies create new possibilities for 24/7 settlement. Asset tokenization creates a new form for the same asset to circulate across different markets.
Bitcoin has already shown one version of this, he said: many exchanges around the world trade the same asset and use tools such as USDT and USDC for trading and settlement. His broader point was that once both assets and settlement funds exist in digital, transferable form, some of the technical barriers to building a global market start to be handled in a new way.
Continuous markets are also preparation for machine trading
Xiao said there is an even more important long-term direction for 7×24 tokenized asset trading: preparing for machine trading.
Do AI agents need rest, he asked. If AI agents can in the future assist human trading or even make trading decisions independently within an authorized scope, why should capital markets still be organized around human working hours?
If a system can run all day and all night but is told that the market is closed and the settlement system is offline, then the infrastructure itself needs to change, he said.
Xiao used a blunt line in his speech: AI does not recognize dollars and renminbi; it recognizes tokenized money. The point, he said, is programmability. If machines are to complete payments automatically, receive funds and deliver assets, the financial instruments involved need to be callable by software.
For that reason, tokenized money, tokenized assets and continuous trading are not only about making life easier for today’s human traders. They are also infrastructure for a future in which AI participates in economic activity. Xiao said the preparation should begin now.
Competition will move from trading into rules and standards
Xiao said another issue that is easy to overlook is financial information and market standards.
He used the example of audit working papers for Chinese companies listed in the US. US authorities wanted access to the papers, while China had concerns tied to data and sovereignty. At the same time, companies still needed the financing capacity of the US capital market. In Xiao’s summary, the eventual arrangement involved inspections in Hong Kong.
The lesson, he said, is that when a company needs a market’s capital, it cannot think only about its own desire to raise money. It also has to face the conditions set by the market providing that capital.
Tokenized markets could create similar issues. Imagine a company going to a capital market to issue shares and being told that assets in that market already exist in tokenized form. Does the issuer accept that form? Does the issuer’s home legal and regulatory system accept it? Can the company issue in that form? If not, it may not be able to enter that market.
The same applies to disclosure. Tokenized equities may come with new disclosure rules, new data requirements and even new accounting questions. Whether issuers comply could become a gatekeeping issue.
So tokenization is not only about how assets trade. It may also bring collisions between market standards. The side that is more needed, and the side with stronger financing capacity, may end up with more say. The side that needs funding often has to compromise. The side that controls capital and market access can set conditions. That is why tokenization should not be treated as a purely technical option. It may affect institutional relationships in cross-border financing.
Can other financial centers remain in the old system?
Against that backdrop of collision, conflict and restructuring, Xiao said global financial centers are likely to diverge.
He outlined three possibilities. The most optimistic is that they do not affect one another and each goes its own way. He said that outcome is unlikely. There will be impact and there will be conflict. The only question is degree.
A middle-case outcome is one super center with several strong followers. In other words, an already dominant financial center becomes even stronger while other centers remain in place but lose relative standing.
The more pessimistic case is that one market stands alone at the top and other financial centers gradually become less important, with their status, role and influence all declining. For other international financial centers, the real risk is a break between financial systems.
If a center does not accept tokenization, blockchain or continuous trading, Xiao said, it stays in the old financial market system while the largest and most important market has already upgraded.
He said almost no international financial center could easily bear that kind of decoupling.
He brought up the Hong Kong dollar’s peg to the US dollar. People often ask why the Hong Kong dollar is not pegged to the renminbi given the close economic ties between Hong Kong and the mainland. Xiao said one way to think about it is the size of the funding pool. Using the figures he cited at the time, the offshore renminbi market is about 1.5 trillion yuan, while the dollar funding pool is on the order of $50 trillion. He added that the statistical scope of those figures still needs to be clarified, but his point was clear: which funding network a financial center connects to affects liquidity, financing capacity and market depth.
A financial center does not exist in isolation, he said. It needs links to a larger pool of capital and to networks for issuance and trading. For that reason, markets should not move lightly toward decoupling, nor should they underestimate the cost. A more realistic direction is to combine the offchain financial market system with the onchain financial market system, accept the change and take part in building the new system rather than standing aside.
New York is still talking about blockchain, but the focus has shifted from Bitcoin to tokenization
Xiao ended by bringing his hypothetical discussion back to the present. Which market is pushing hardest in this direction today? In his view, it is the United States.
Europe is still discussing the issue, he said, while Asia is acting more in a fragmented way, with each market doing its own thing. He used the phrase “a pile of loose sand” at the event to stress that Asia has not yet formed a common set of rules, standards and a unified system capable of competing with another large market system.
By contrast, the US is moving on both the money-market side and the capital-market side at the same time. Stablecoin legislation is one part. Cooperation around tokenized deposits among large banks and smaller banks is another. Xiao mentioned institutions including JPMorgan, Citigroup, Wells Fargo and Bank of America, along with alliances involving smaller banks.
On the capital-market side, he said, there are also experiments in asset tokenization and longer trading hours.
Xiao also recounted a conversation with a friend who had traveled from Silicon Valley to New York. When asked what stood out this year, the friend said everyone in Silicon Valley was talking about AI. But in New York, discussions around Web3, blockchain, digital currencies and digital assets were just as active as a year earlier.
From the outside, Xiao said, it may look as if the US is talking only about AI. But if you meet financial institutions in New York, they are still talking about blockchain, digital assets and digital money. The difference is that the focus has shifted from Bitcoin to tokenization. He added that Ondo and other institutions working on asset tokenization at the summit also showed that this shift is already underway.
His closing point was that attention should not stay fixed on one asset or one product. What matters is how money, assets, trading, settlement and rules are changing together. The integration of offchain finance and onchain finance is now something markets have to face seriously, and other financial centers should not stand outside it.