Written by: Choi, Bitpush

If the approval of the Bitcoin spot ETF in 2024 is seen as Wall Street's cautious exploration of the crypto world, then everything that has occurred in the past twelve months silently proclaims: the exploratory phase is over, and a systematic technological integration is becoming a reality.

From stablecoins becoming a realistic bridge for traditional finance to last night's announcement by LayerZero launching the institutional-facing Layer1 blockchain "Zero," in partnership with giants like Intercontinental Exchange (ICE), DTCC, and Google Cloud, along with strategic investments from Citadel Securities and ARK Invest... each step points in the same direction: blockchain is being systematically integrated into the arteries of traditional finance.

Once the news broke, the market echoed the familiar tune: "Is Wall Street entering, and is a bull market reborn?"

But upon careful examination, what truly merits attention in this news is not "Will Wall Street drive up coin prices," but rather a deeper issue: Wall Street is seriously considering using blockchain as part of the financial infrastructure. The impact of this on the crypto world may be more far-reaching and complex than any short-term fluctuations.

What Wall Street Wants is Not Coin Prices

The positioning of LayerZero's Zero is very clear: it aims to solve not the on-chain application ecosystem, but rather the underlying process issues in financial markets such as trading, clearing, settlement, and collateral management. In other words, this chain is not trying to make retail trading faster, but rather to make financial institutions' backend systems more efficient.

The composition of its partners further illustrates this point. Citadel Securities is one of the most important market makers globally, DTCC is the core infrastructure of the U.S. securities market's post-trade system, and Intercontinental Exchange (ICE) operates a significant network of exchanges, including the New York Stock Exchange. These institutions are discussing blockchain not because they want to allocate a specific token, but because blockchain theoretically can address several long-standing pain points in traditional finance: complex reconciliation, long settlement periods, low collateral utilization efficiency, and difficulties in interoperability between systems.

For them, if blockchain has value, it is reflected in "Can it reduce costs, minimize friction, and enhance capital efficiency," rather than "Can it spark a wave of speculation." This is also why Zero's narrative is closer to "global market infrastructure" rather than "a new generation of public chain ecosystems."

LayerZero solves the "connection" problem, but to truly enable global finance to operate on-chain, issues of privacy, data, and asset provenance still need to be resolved.

Currently, besides LayerZero, there are three projects particularly favored by Wall Street:

1. Canton Network

If you think financial institutions would let all transaction data "run naked" on public chains, you are too naive. Led by Digital Asset and deeply participated by Goldman Sachs, Bank of New York Mellon, Canton Network is becoming the privacy clearing layer for top banks. It complements LayerZero: the latter is responsible for transporting assets on the "high seas," while the former processes highly sensitive settlement processes within the "bank's internal network." This hybrid architecture of "public chain + private network" is the form that institutions are truly willing to use.

2. Chainlink (CCIP)

By the end of 2025, Chainlink will achieve automated processing of corporate actions data through AI and oracle technology. This means that through CCIP, the traditional financial messaging system SWIFT can directly interact with on-chain smart contracts. In Wall Street's eyes, Chainlink has evolved from a "price feeding tool" to a trusted financial data infrastructure.

3. Ondo Finance: The "On-chain Export" of RWA

As BlackRock's low-profile partner in the DeFi sector, Ondo is tokenizing U.S. Treasury yields, offering not a virtual "inflation hedge story," but real cash flow from U.S. Treasury interest. This also makes it one of the most robust bridges connecting traditional capital markets with crypto liquidity.

They collectively point toward a trend: Wall Street is not embracing the "crypto circle," but rather extracting the financial tool characteristics of blockchain and embedding them into the efficiency loops of the existing system.

Does this have anything to do with the "Crypto Circle"?

The answer is: related, but the logic is changing.

In the past few years, the growth of the crypto market mainly relied on two things: liquidity and narrative. When macro liquidity is ample and risk appetite increases, substantial funds flow into high-volatility assets, causing token prices to rise and attracting more attention and capital, creating a positive feedback loop. This logic peaked in 2021 and deeply ingrained the idea of a "full bull market."

However, the logic behind institutions using blockchain is different. They are more likely to penetrate through stablecoins, tokenized government bonds, on-chain settlement, and collateral management. The reason is simple: these scenarios are directly related to real financial needs and are easier to implement within a compliance framework.

For instance, DTCC's collaboration with blockchain companies to advance the tokenization of U.S. Treasury Bonds is a typical example starting from "collateral and settlement efficiency," rather than from trading speculation. The goal of such projects is to facilitate the smooth flow of assets between different institutions, rather than making the assets themselves easier to speculate on.

Once these infrastructures are gradually established, the on-chain asset structure will change. Previously, on-chain assets mainly consisted of high-volatility assets and stablecoins; in the future, there may be more low-risk, collateralizable, and settleable real assets. This will make on-chain finance resemble a financial system rather than a purely speculative arena. Another crucial trend: once traditional mainstream assets are massively tokenized and brought on-chain, they may become new "liquidity black holes." Imagine if stocks of Apple and Microsoft could be traded and settled on-chain in nearly real-time at low cost, then global capital would undoubtedly lean toward these assets that combine liquidity, compliance, and real value support.

Conclusion

We must acknowledge that the era of cryptocurrencies as a "speculative fantasy detached from reality" is coming to an end. However, as a financial tool that enhances economic operational efficiency, it is just beginning.

The future crypto market may gradually differentiate into two parallel worlds of logic: on one side are high-volatility speculative assets, which will still have cycles and narratives; on the other side are infrastructures and asset layers that closely align with real financial needs, which grow more slowly but are also more solid.

In other words, blockchain is gradually transforming from a "place to host speculative assets" to a "pipeline within the financial system." This process will not create myths of overnight wealth but may ultimately determine whether this industry can truly integrate into the pulse of the global economy.