With assets on the blockchain, Wall Street no longer closes: Who will manage the market risks at 3 a.m.?

Editor's Note

On July 15, 2026, one of Wall Street's most important back-office infrastructures completed an experiment that is not easily seen by ordinary investors but may affect the future market structure.

DTCC, a U.S. depository trust and clearing company, announced that its U.S. depository trust company, DTC, has converted securities previously held by DTC into tokens and completed various transactions in a real-world production environment, including collateralized lending, securities lending, U.S. Treasury bonds and repurchase agreements, stock transactions, stock token transfers, and central counterparty margin. More than 30 institutions participated, spanning asset management, banking, exchanges, market makers, custodians, blockchain networks, and digital asset service providers. DTCC plans to officially launch its tokenization services in October 2026.

Eight days later, the U.S. Securities and Exchange Commission announced that it would hold a public roundtable meeting on September 17 to discuss issues related to the preparation of the U.S. stock market for 24-hour trading, including overnight trading, operational arrangements, market resilience, and the opportunities and challenges of extended trading hours. This was a policy discussion, not a decision to fully implement 24-hour trading in the U.S. stock market, but it showed that a 24-hour market had entered the formal regulatory agenda.

These two issues each have their own technological background and regulatory procedures, and cannot be simply merged into a single reform. However, when securities begin to have the ability to move across networks and time zones, and when regulators begin to discuss extending market operating hours, they will ultimately meet on the same issue:

If Wall Street doesn't close its doors again, who will manage the market risks at 3 a.m.?

(Image caption) A schematic diagram of the concept of converting traditional securities into tokens in a real production environment by the U.S. Depository Trust & Clearing Corporation (DTCC), symbolizing that regulated assets are beginning to enter programmable financial infrastructure while retaining their original legal rights and investor protection.

The market clock is never just hanging on the exchange wall.

For over a century, the opening and closing of the stock market has been not only a trading schedule but also a risk management system.

After trading ceases, brokerages can verify accounts, banks can allocate funds, clearinghouses can calculate risk exposure, listed companies can prepare announcements, and exchanges and regulatory agencies have time to handle any anomalies that occurred during the day. Those few hours of market closure effectively serve numerous functions, including corrections, reconciliations, replenishing liquidity, and repricing.

Electronic trading has significantly increased speed, but it hasn't completely eliminated this rhythm. Even with extended pre-market, after-hours, and overnight trading sessions, key liquidity, company announcements, index calculations, fund valuations, bank funding, and many back-office processes still revolve around a relatively clear trading day.

Tokenization is beginning to loosen this arrangement.

Distributed ledgers have no inherent closing time. Smart contracts can execute in any time zone. Securities, if in token form, can also move between different qualified networks and wallets. Technology has thus opened a door, but whether the market can safely pass through depends on whether trading, clearing, settlement, payments, information disclosure, and legal liability can keep pace.

There are actually many market clocks.

There's one exchange, one bank, one clearinghouse, one listed company, and one regulatory agency. If any of them remains stuck in the old timetable, the so-called 24/7 market could be disrupted at some point.

How does DTCC's tokenization differ from typical RWA projects?

In recent years, a large number of real-world asset tokenization projects have emerged in the market. Some projects have created on-chain tokens from fund shares, real estate income rights, debt, or commodity rights, and then circulated them through private placement platforms or digital asset markets.

The significance of DTCC's trial lies in the fact that it did not create a separate ownership system that is detached from the traditional market.

Traditional securities held by DTCs are converted into tokenized representations, a process known as digital mapping or "digital twinning." Participants can switch between the traditional and tokenized forms, while the tokenized version must retain the original security's rights, ownership history, investor protections, and legal status. This service has previously received a no-action letter from the SEC and applies to Russell 1000 index constituents, ETFs tracking major indices, and certain highly liquid assets such as U.S. Treasury bills, bonds, and notes.

The value of this arrangement lies not in replacing a stock certificate with a string of blockchain code, but in attempting to bring regulated securities into a programmable environment while maintaining the legal and operational safeguards accumulated in traditional markets over decades.

DTCC currently holds assets worth over $114 trillion. By 2025, DTCC's subsidiaries are expected to handle $4.7 trillion in securities transactions. When financial infrastructure of this scale begins to explore how to make securities flow on-chain, tokenization will no longer be just an experiment in the crypto asset market, but a formal project in the back-end architecture of the US capital markets.

However, the July 15th transaction was completed within hours, demonstrating that various asset classes and workflows can be integrated into the production environment, but not that the entire market can operate uninterruptedly. A significant amount of institutional, financial, personnel, and legal arrangements still exist between the two.

(Image caption) Scene of a public roundtable meeting prepared by the U.S. Securities and Exchange Commission to discuss preparations for 24-hour trading in the stock market, reflecting the regulator’s formal assessment of overnight risks, market resilience and operational arrangements involved in extending trading hours.

Securities can move around all day; can cash keep up?

Every securities transaction has two legs.

One is securities, and the other is capital.

While stocks or U.S. Treasury bonds can be transferred on-chain, this does not mean that the payment end has the same speed and operating hours. If securities are delivered at 3 a.m., but bank funds still have to wait until the next business session for final settlement, both parties to the transaction will still face credit risk, liquidity risk, and legal finality issues.

Therefore, an 24/7 tokenized market cannot rely solely on security tokens. It also needs a set of regulated, liquid, and legally recognized on-chain funding instruments.

This instrument could be a tokenized deposit issued by a bank, a strictly regulated stablecoin, a wholesale central bank digital currency, or other forms of digital cash supported by existing payment and clearing systems. The final system adopted remains uncertain, but the basic requirements are clear: the security leg and the cash leg must be able to settle within the same timeframe, and the market must know when the payment has legal finality.

Without 24/7 funding, there is no complete 24/7 market.

A more practical question is whether banks are willing to maintain 24-hour liquidity for this purpose. If a large margin call occurs suddenly at 3 AM, can the brokerage firm obtain cash immediately? If the value of collateral falls rapidly, can the bank's credit line automatically increase? Smart contracts can issue payment instructions, but they cannot create dollars out of thin air, nor can they replace the bank's credit responsibility.

(Image caption) Stocks, U.S. Treasury bonds, repurchase agreements, securities lending, collateral and margin processes are interconnected through a digital network, showcasing the key market functions covered by DTCC tokenization services.

The SEC is facing an unbreakable chain of responsibility.

The SEC's announcement of a roundtable discussion does not mean that US stock markets will soon eliminate closing times altogether. Regulators first need to understand which risks being shifted to less-attended trading hours by extending trading hours.

If a publicly traded company discovers a major cyberattack in New York at 3 a.m., is it required to issue an immediate announcement? If the stock price drops rapidly after the announcement, will anyone on the exchange determine that a trading halt is necessary? Can a brokerage's risk management system prevent abnormal leverage? If an investor encounters an account error, can they contact staff? Can clearinghouses calculate new margin requirements in real time? And does the regulatory system have sufficient manpower and algorithms to identify manipulation and erroneous trading under conditions of low liquidity?

These issues constitute a chain of market responsibility:

Listed companies are responsible for information disclosure, exchanges are responsible for trading order, securities firms are responsible for client and account risks, clearing institutions are responsible for performance and margin, custodian institutions are responsible for asset security, banks are responsible for fund flow, regulatory agencies are responsible for market surveillance, and technology providers are responsible for ensuring the continuous availability of networks and systems.

Current financial markets rely on operating hours, contracts, regulations, and human oversight to arrange these responsibilities within a relatively clear institutional framework. Once the market operates continuously, every responsible party must answer the same questions: Who is on duty at night, who has the right to suspend the system, who can reverse erroneous transactions, and who bears the losses after a technical failure?

Blockchain can record a transaction, but it cannot determine on its own whether the transaction was sent by a stolen account; smart contracts can add margin, but they do not consider whether the market is experiencing systemic mispricing; artificial intelligence can detect anomalies, but ultimately someone still has to decide whether to suspend trading, refuse transactions, and initiate emergency procedures.

The most difficult part of the 24/7 market is that responsibility never ends.

Asian investors may benefit, but may also incur new costs.

With US stocks extending trading hours, Asian investors may be the first to feel the changes in their lives.

Investors in Hong Kong, Singapore, Tokyo, Seoul, and Taipei currently typically need to make decisions late at night or in the early morning to participate in the main trading hours of US stocks. If US stocks achieve greater liquidity during Asian daytime trading, investors can manage some of their US assets during normal working hours, reducing time barriers to cross-border asset allocation.

However, increased trading hours do not necessarily bring the same level of liquidity.

In the overnight market, where there are fewer participants, bid-ask spreads may widen, order book depth may decrease, and even a small number of trades can cause significant price fluctuations. If institutional investors do not provide continuous quotes during the relevant period, retail investors may appear to have more trading time, but in reality, they may complete trades at worse prices.

Information distribution is another issue.

If an American company releases a major announcement during Asian daytime but in New York early morning, Asian investors may be the first to trade; however, local American analysts, investment managers, media, and retail investors are not yet fully engaged. Conversely, if the company still releases information according to New York time, Asian investors may not necessarily have a more equitable information environment.

Therefore, 24-hour trading requires simultaneous adjustments to listed company announcement rules, news distribution, research services, investor education, and client support. A longer market duration does not automatically equate to a fairer market.

(Image caption) The empty streets and lit office screens in New York's Wall Street financial district at 3 a.m. highlight the real challenges of nighttime liquidity, risk calculation, and staffing when markets are no longer closed.

How does the financial system operate at 3 a.m.?

One can imagine a scene that is not far off.

At 3 a.m. in New York, a major publicly traded company confirmed that its core data system had been attacked and immediately issued a statement to the market. Investors in the Asian trading session began to reduce their holdings, and some funds in Europe also adjusted their positions. After the stock price plummeted, the value of the tokenized securities used as collateral decreased simultaneously, the clearing system recalculated the risk, and smart contracts issued margin calls to several brokerages.

At this point, the market needs more than just high-speed networks.

Listed companies need someone to confirm the content of the announcements; exchanges need to determine whether prices are disorderly; brokerages need to contact clients and adjust risk limits; banks need to provide dollar liquidity; clearing houses need to process margin calls; custodians need to confirm that assets have not been double-pledged; regulatory agencies need to identify market manipulation; and news media need to quickly transmit confirmed facts to investors in different languages and time zones.

If any link in the chain fails, a new kind of time mismatch may occur in the market: a transaction has occurred, but the information is not yet complete; collateral has depreciated, but the funds have not yet arrived; the algorithm has reacted, but the person responsible for making the final decision has not yet arrived at work.

This is precisely the market risk at 3 a.m. It's not mysterious, nor does it belong solely to blockchain. It stems from the inability of clocks from different systems to synchronize.

(Image caption) An office scene in Hong Kong where Asian investors trade US stocks and tokenized assets via multi-screen during the daytime, illustrating that while time zone convenience may bring new costs such as poor liquidity in overnight markets and uneven information distribution.

Web4 needs a 24/7 financial infrastructure map.

The Web4 as understood by GFM should not be simply described as another technology name following Web3.

It is closer to an institutional crossover layer: traditional finance provides legal rights, custody, and clearing; blockchain provides programmability and cross-network flow of assets; artificial intelligence is responsible for risk identification, liquidity prediction, and anomaly monitoring; digital identity systems confirm the qualifications of traders and institutions; and news, announcements, and trusted content systems are responsible for maintaining information synchronization in global markets.

Following this line of thought, the future all-weather financial infrastructure will consist of at least eight interdependent components:

Exchanges and trading venues determine when a trade can be executed.

Clearing and custody institutions such as DTCC maintain asset rights and order of performance;

Banks and on-chain payment tools provide funds that are available instantly;

Tokenized deposits and regulated digital cash enable the simultaneous settlement of securities and payments;

Brokerages and asset management firms manage clients, leverage, and liquidity;

Listed companies and the announcement system will maintain continuous information disclosure;

Regulatory bodies such as the SEC monitor anomalies and establish accountability rules;

Multilingual media and AI information systems deliver important information to global markets simultaneously.

Asian investors should also be included in this chart. They are not merely users on the periphery of the market, but rather key participants in the 24/7 market formation of liquidity, price discovery, and cross-time zone capital allocation.

The value of this diagram lies in reminding the market that asset tokenization is only one aspect. Without the synchronized connection of funds, information, identity, clearing, regulation, and accountability systems, the so-called 24/7 market remains merely a trading hall with extended hours.

GFM Observation: The market may remain open, but there must be no gaps in responsibility.

Over the past two decades, global financial markets have invested heavily in faster execution, shorter latency, and higher trading volume. The next phase of competition will increasingly focus on the market's ability to maintain reliable operation over extended periods and the capacity to quickly identify responsible parties and access available funds during crises.

DTCC's production environment trial demonstrates that regulated securities can now enter the tokenization process and exhibit programmability in certain trading and collateral scenarios. The SEC's preparation for a 24-hour trading roundtable raises another, more challenging issue for public discussion: as market hours lengthen, can market protection mechanisms also be extended? ( DTCC )

(Image caption) A market crisis scenario at 3 a.m. includes the sharp drop in stock prices after the announcement of a cyberattack, the recovery of margin calls on smart contracts, and the global time zone linkage reaction, emphasizing that there should be no gaps in the chain of responsibility, funds, and information synchronization in the 24/7 market.

The future of Wall Street may not suddenly transform into a market without a closing bell. More likely, trading hours will gradually extend, assets will be gradually put on the blockchain, clearing and funding systems will be gradually connected, and different market clocks will slowly converge over many years of adjustment.

The standard for measuring the success of this reform should not be merely whether investors can press the buy button at 3 a.m. More importantly, when errors, fraud, liquidity shortages, cyberattacks, or price crashes occur at 3 a.m., are there still people on duty in the market, are there funds fulfilled, are there laws that can be enforced, is information able to reach every time zone, and are there institutions willing to take responsibility for the final outcome?

The market may remain open, but responsibility cannot leave any period of time unmanaged.

Disclaimer

This article is based on publicly available information and information available as of the time of publication. It is for news research and information exchange only and does not constitute investment, legal, tax or regulatory advice. Related services, policies and market arrangements are subject to change.