The Financial System Is Going On-Chain

Ben Lilly
|
Aug 7, 2025
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The Bleeding Edge
|
7 min read


The chairman of the SEC just dropped a bombshell.

During a special event hosted by the America First Policy Institute, SEC Chair Paul Atkins signaled that, at last, regulators are eager to “unleash” innovation in the crypto industry.

Those were the exact words this week. The purpose is to usher in a golden age of finance.

But the news from Washington, D.C., didn’t stop there.

There was a tsunami of comments and initiatives coming from virtually every angle. The pace is so overwhelming that I’m getting hourly updates now on some of the background activity taking place that supports the comments over the last week.

This is the most bullish week in crypto I’ve ever seen… And I’ve been active in the industry for over a decade now.

The market has not woken up to this whirlwind of development. The urgency I’m seeing is nearly impossible to articulate.

But today, I’m going to do my best to match their energy and optimism. I cannot emphasize enough the magnitude of the shift taking place over just the last week.

Let’s get into it, and I’ll explain why the coming weeks might represent your last opportunity to get in before the train leaves the station.

All Hands On Deck

On July 31, the chairman of the SEC delivered a speech to the America First Policy Institute.

The speech is noteworthy because it came a day after a major document was released by the White House.

It released its findings on July 30 in a 166-page document. The report, titled “Strengthening American Leadership in Digital Financial Technology,” was a byproduct of the January 23 executive order of the same name.

The order intended to create a working group on digital asset markets whose task was to lay out the plan to make America the leader in blockchain technology and the digital assets economy.

The document covers topics like markets, regulators, banks, stablecoins, payments, taxation, illicit finance, and much more.

It was a well-articulated roadmap that was bullish for the future of digital assets and public blockchains in general.

Then, a day later, the chairman of the SEC took the stage and took things to another level of excitement by introducing “Project Crypto.”

Chairman Atkins said it as plainly as possible… America’s financial system is moving onchain.

Here is the transcript where he laid it out.

If it were simply a speech on how they want to bring crypto and public blockchains into financial markets, or allow investors to more easily purchase crypto assets, that would be exciting enough.

But Atkins went all-in.

It wasn’t a speech on how to bring crypto and digital assets into our financial system, but on how they’re bringing the entire financial system to crypto.

He’s talking about moving the entire financial system on-chain.

This was unexpected. Especially from a conservative regulator like the SEC.

This is why it’s nearly impossible to articulate just how massive the last week has been. The importance of the digital asset industry just went up an order of magnitude.

We’re talking about how you pay your bills, how you get paid, taxes, your investment account… The entire system.

To say this is a once-in-a-generational moment might be an understatement.

Atkins didn’t stop there with a big picture explanation. He drilled down. He went on to detail a framework to create what he calls “super-apps.”

These are venues where non-security crypto assets and crypto asset securities are to be traded side-by-side on regulated platforms.

But what’s more, even a framework for non-security crypto assets to trade on venues not registered with the SEC.  The SEC is also clearing the way for margin capabilities.

This blows the door open on the possibilities.

On the Brink of Mass Tokenization

We might recall a recent issue titled The Bleeding Edge – Tokenizing Stocks from last month where we broke down Robinhood’s plan on how they will allow the trading of stocks, crypto, real estate, art, private capital, and more… All on their app.

It seemed almost too good to be true. One login to allow access to any asset.

But that’s the reality now.

We are about to see a whirlwind of innovation come to financial markets.

And the SEC wasn’t alone on these comments.

The Commodity Futures Trading Commission (CFTC) is the regulator for U.S. derivative markets. They are essentially the regulator for markets that the SEC doesn’t regulate.

Acting Chair Caroline Pham came out shortly after Atkins on August 1 with a statement…

The CFTC is wasting no time in fulfilling President Trump’s vision to make America the crypto capital of the world.

And then again on August 4…

The CFTC is full speed ahead on enabling immediate trading of digital assets at the Federal level in coordination with the SEC’s Project Crypto.

All hands are on deck to push this initiative.

From what we’ve seen to date in regards to the President, SEC, and CFTC… They’ve fulfilled what they’ve set out to do thus far.

We saw the GENIUS Act signed into law on July 18. Digital Asset and Crypto committees were created in Congress. Digital Asset advisors at the U.S. Treasury and the White House. And even Secretary of the Treasury Scott Bessent echoed similar sentiments on digital assets being the top priority for this administration.

All of these past events have been incredibly bullish for the industry.

But the last week has superseded all that momentum, pushing it even further.

This all comes ahead of what is set to be instrumental in putting it all together – the CLARITY Act.

It’s a piece of legislation that is coming to a Senate vote in late September, which will result in the bill landing on the President’s desk for signature and making it a reality.

The bill already passed the House of Representatives with 294 votes for versus 134 against. And the Senate is arguably the easier of the two branches when it comes to crypto legislation. Meaning the CLARITY Act is positioned for success.

What we have here is a unified front across Congress, the Presidential branch, and regulators.

It’s why Matt Hougan, the Chief Investment Officer of Bitwise, came out shortly after Atkins’ speech was published and said it’s “the most bullish document I’ve read on crypto that wasn’t written by some yahoo on Twitter. It was written by the chairman of the SEC.”

As for what this means for investing…

The Opportunity

Hougan calls this moment a “generational” opportunity.

Given the fact that the entire financial system is coming onchain, he’s spot on. But he went on to lay out three investment opportunities that stand out.

The first was Ethereum and other Layer 1 blockchains that power tokenization and stablecoins. This one is clear since these blockchains will act as the backbone for the financial system.

The second was “super-apps” like Coinbase and Robinhood. With all assets being accessible at any minute of the day, it’s clear where most users will interact with this new system.

In fact, subscribers of Permissionless Investor already have exposure to a pick that is on Ethereum and is building its own super-app.

The last opportunity he touched on was DeFi. This is another theme we’ve been touching on at Permissionless Investor.

That’s because stablecoins will run through DeFi. There’s an entire financial economy coming to life on layer-one blockchains, and it is key to running the protocols that are the pillars of this new economy.

These are the banking primitives of tomorrow.

But there’s one area that Mr. Hougan left out, and it’s a theme we’ve been tracking for some time.

The agentic economy.

We’ve written about this topic at length in several issues of The Bleeding Edge. When agentic artificial intelligence enables humans to direct our AIs to interact with computers in the same way that we do, it’s going to change everything about how we utilize AI and unlock a new level of productivity and progress.

Jeff got into this with a more specific use case in yesterday’s Bleeding Edge – The Frictionless Future of Shopping.

And that was just one aspect of how the rise of agentic artificial intelligence is going to bring a new level of ease to our day-to-day tasks and obligations. The agentic economy expands to encompass all the ways this trend is going to touch every aspect of our lives in ways most haven’t even realized yet.

You can also read my essay, The Agentic Economy Goes Permissionless, if you want to learn more about how the agentic economy is coming onchain.

AI agents will be able to tap into compute via blockchain-based marketplaces, make payments, handle finances, and engage in this new financial system with ease.

This is a golden age of innovation coming. And with Congress on the brink of signing crucial legislation, the clock is ticking.

Don’t miss out on what could be the opportunity of the century.

Your Pulse on Crypto,

Ben Lilly


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