Xiao Feng's Speech in Shanghai: Blockchain as an Emerging Financial Market Infrastructure

Editor | Ivan Wu said Blockchain

This article is the transcript of the speech delivered by Xiaofeng, Vice Chairman of Wanxiang Holdings and Chairman of Wanxiang Blockchain, at the Shanghai International Blockchain Week on October 23, 2025. In this speech, Xiaofeng titled “Blockchain: New Financial Infrastructure” and systematically reviewed how blockchain has evolved from a peer-to-peer electronic cash system to a new underlying architecture that reconstructs the global financial market since the birth of the Bitcoin white paper in 2009. He traced the historical evolution of financial infrastructure from the logic of payment, clearing, and settlement, pointing out that the essence of blockchain is a decentralized ledger system that can realize “payment as settlement, transaction as delivery.” The speech deeply analyzed the institutional changes and tokenization competition in the U.S. market, elaborating on the migration process of the financial system from “digital native” to “digital twin,” as well as the irreversible trend of asset and currency tokenization. Xiaofeng proposed that blockchain carries not only technological innovation but also a replacement of the infrastructure of the global financial system—from centralized trust to algorithmic trust, from atomic structures of wealth to bit structures of wealth. The future financial market will be centered around blockchain, building an open, efficient, and low-cost new generation of global financial network.

The manuscript is based on live transcription provided by Wanxiang Blockchain. The author's views do not represent the views of Wu Shuo, and readers are advised to strictly adhere to the laws and regulations of their location. Please listen to the full content on Bilibili:

From the Bitcoin white paper, we can see the starting point of Blockchain, from cash to electronic payment systems.

Xiao Feng: The content I want to share with you today is “Blockchain: The New Financial Infrastructure.” I would like to summarize how the distributed ledger of blockchain has evolved and transformed step by step since the birth of Bitcoin's blockchain in 2009, and how it is about to reconstruct the infrastructure of the financial market.

To understand this evolution, one may need to start with the Bitcoin white paper. In 2009, the Bitcoin Blockchain white paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” was born. Satoshi Nakamoto aimed to create not just a system for sending digital currency, but a new payment settlement system akin to cash.

We know that cash has certain characteristics from the perspectives of payment, clearing, and settlement. First, it is point-to-point: cash payments are made directly between Party A and Party B, and cash payments are settled immediately, without any intermediaries or clearing processes. At the same time, transactions are settled one by one — you give money, the other party gives goods, and the transaction is completed.

However, cash payments have their disadvantages, which is that remote payments cannot be completed, and payments over a certain distance become very difficult to complete. Additionally, it is not convenient for making large payments.

The electronic cash system created by Satoshi Nakamoto retains the advantages of cash such as “payment is settlement, and settlement is done on a per-transaction basis,” while overcoming the disadvantages of cash payments. Therefore, Bitcoin not only enables remote payments but also supports large transactions, making it very convenient for large payments.

In addition to Bitcoin, Satoshi Nakamoto also created a new payment settlement system. Given the various shortcomings of cash payments, electronic currency emerged, making the payment, clearing, and settlement of electronic currency much more complex — to ensure the consistency, integrity, accuracy, and finality of payments remotely, a lot of intermediaries are needed, resulting in central registration, central custody, central counterparty transactions, and central settlement.

Under the existing bank account system, we first need to swipe the card (make a payment). After swiping, the PoS machine contacts the bank where the account is held to confirm that there is enough money in the account and holds the funds; this is called clearing. Finally, the money is transferred from our account to the merchant's account, which is called settlement. The payment, clearing, and settlement are divided into three steps, which are much more complicated than cash payment. Of course, after achieving a cashless currency system, this must be done to ensure the finality, consistency, and accuracy of payments.

The Evolution of Financial Infrastructure in the United States and the “Document Crisis”

In fact, looking at the evolution of financial infrastructure in the United States, it has always been in a process of constant evolution and development. Before the 1960s, the U.S. was still in the era of physical stocks/paper stocks. As trading volume continued to increase, the problems of clearing and settlement gradually emerged. By the 1970s, the U.S. stock market experienced a “paperwork crisis”: with the sustained growth of trading volume, the speed of clearing could not keep up with the pace of trading. After a transaction was completed, it was common to see cars coming and going on Wall Street, transporting stock certificates from Morgan Stanley to Goldman Sachs, and then from Goldman Sachs to J.P. Morgan. This was because different clients purchased stocks from other brokerage firm clients, and physical stocks had to be delivered through physical transportation. Later, there were severe clearing delays, leading to the New York Stock Exchange often closing on Fridays. Why? Because stocks from the entire week had to be halted for a day for settlement.

Thus, the industry decided to establish a central custodian company to concentrate all stocks under one roof. Although physical stocks still need to be moved, the transfers are only between different rooms, which significantly improves settlement efficiency.

Later, a central registration, central custody, and central settlement system emerged, evolving into the establishment of DTCC (Depository Trust & Clearing Corporation) in 1999. This was necessary to meet the trading volume demands of the US stock market, enabling such a high trading volume to achieve 100% clearing and settlement on the same day.

Blockchain Reconstructs Financial Infrastructure: From Centralized to Peer-to-Peer

Starting from 2025, the United States will begin to reconstruct a new payment settlement system based on distributed ledger technology, adopting a peer-to-peer model, with fewer links, higher efficiency, and lower costs, based on Blockchain technology. Essentially, Blockchain is a new type of financial infrastructure, and the definition of financial infrastructure refers to a complete set of institutional arrangements concerning transactions, clearing, and settlement.

What are the differences between new and old financial infrastructure?

The old system, which is the financial infrastructure we are currently operating, adopts a model of central registration, central custody, central counterparty trading, and central settlement, while the new financial infrastructure based on Blockchain distributed ledger transforms into peer-to-peer payment and settlement, with transaction settlement occurring simultaneously. This is why all digital asset exchanges around the world can easily facilitate 7×24 hour trading, while stock exchanges cannot.

Why? Because the settlement methods of the two are different: the old system adopts a “netting” model, while the new financial infrastructure of Blockchain adopts a “gross settlement” model, which does not require stopping at a specific point in time to clear previous accounts, nor does it need to net before settling. This is a significant difference between the two systems.

Tokenization Competition in the U.S.: The Battle Between Coinbase and Nasdaq

We all know that the United States is engaged in a competition regarding two methods of tokenized stock trading in the American capital markets. Coinbase has submitted a complete set of tokenized stock trading proposals to the SEC. In this proposal, the so-called central registration, central custody, central trading, and central settlement processes have all been eliminated. If Coinbase's proposal is adopted, half of the people on Wall Street would be unemployed.

Wall Street certainly does not want to accept this reality. Wall Street institutions, represented by Nasdaq, submitted a proposal framework for tokenized stock trading to the SEC a month ago, retaining the DTCC that I just mentioned. So far, the DTCC is only responsible for the clearing of stocks, bonds, and funds, and according to Nasdaq's proposal, the DTCC will also take on token clearing functions in the future, which means that Nasdaq's plan preserves the jobs of most Wall Street institutions.

The current dilemma has been handed over to the SEC. It is expected that the SEC will make a ruling in the first half of next year to decide which plan to adopt for allowing commercial entities to trade tokenized stocks, which could be Coinbase's plan, Nasdaq's plan, or possibly allow both plans to be piloted simultaneously, or even merge the two into a compromise plan.

The core differences between these two financial infrastructures are mainly reflected in several aspects:

1. Settlement Mechanism. The old system required multiple intermediary agents to complete the settlement, while the new system achieves transaction settlement and payment settlement instantly.

2. The essence of the architecture. The old system requires centralized registration and custody, while the new system completes registration on a distributed ledger, eliminating the need for registration, custody, and settlement institutions. Therefore, in the proposal submitted by Coinbase, these roles of DTCC no longer exist.

3. Trust Mechanism. Traditional financial infrastructure requires strong centralized institutions for trust endorsement, while distributed ledgers rely on consensus algorithms and cryptography to establish trust mechanisms.

4. Risk Characteristics. Centralized institutions are prone to single points of failure, while decentralized institutions significantly reduce this risk but also introduce other risks, such as smart contract risks, digital wallet risks, and so on.

5. Service Coverage. Traditional financial institutions are constrained and limited by specific jurisdictions or centralized systems, while distributed ledgers are almost cross-time, cross-region, cross-space, cross-entity, and cross-institution, which is the core difference between the two.

From “Digital Native” to “Digital Twin”: The On-Chain Transformation of the Financial System

Looking at all of Trump's actions after taking office from this perspective, we can find the essence beneath the complex surface: the United States is actually doing one thing, which is replacing the infrastructure of its domestic financial market, transitioning from traditional financial infrastructure to a new set of financial infrastructure. From congressional legislation to the president issuing a 166-page document on ensuring America's leading position in digital financial technology, and then to the SEC chairman's repeated speeches stating that the SEC will establish innovation exemption mechanisms, safe harbor plans, and whitelist for all innovations related to Crypto. All of this indicates that this is not just a personal action by the president, but a unified action from the U.S. legislative body, government executive departments, industry enforcement agencies, and industry regulatory departments — moving the U.S. financial market from off-chain to on-chain, allowing the U.S. financial system to operate on-chain. This is also the meaning expressed in the SEC chairman's speeches, which is to replace the financial infrastructure. Perhaps five or ten years from now, buying U.S. stocks will no longer mean buying shares, but rather buying equity tokens of a certain U.S. company — this possibility is very high.

The chairman of the U.S. Securities and Exchange Commission has mentioned the example of “technology changing industries” in several speeches. He stated that the medium for recording audio in human society has undergone three iterations in the past few decades. The earliest medium for recording audio was vinyl records, which evolved into tapes by the mid-20th century, and in this century, it has transformed into digital media, with everyone being able to store audio on their mobile phones. He also noted that these three technological iterations of audio recording have completely restructured the global music industry, and distributed ledgers will similarly restructure the U.S. financial system.

This example is very well put, and he also said a phrase, “If it can be tokenized, it will be tokenized”: as long as something seems to be able to be tokenized, it will ultimately be tokenized. This phrase is the source of “everything on the chain, everything can be tokenized, everything can be traded,” and it is also the basis for Coinbase's claim to build a Super APP.

The above are the views expressed by the U.S. Securities and Exchange Commission in several speeches. I have summarized them and, in turn, proven that what the U.S. is doing is reconstructing the entire financial infrastructure.

What will reconstruction bring? Reconstruction will bring us from “digital native” to “digital twin”. Before such a reconstruction, Satoshi Nakamoto invented Blockchain, and Ethereum enhanced, optimized, and enriched Blockchain, enriching distributed ledgers. We have created digital native items like Bitcoin and Ethereum from nothing, from 0 to 1, on distributed ledgers and Blockchain. These digital native items have been running for 15 years now, and we can regard it as a huge social engineering experiment. This experiment has proven that Blockchain distributed ledgers, digital wallets, and smart contracts are all very valuable. Now traditional finance, or digital twin, has taken over the results of this experiment, beginning to move the entire financial market system onto the chain, onto a new financial infrastructure, where the new financial infrastructure has fewer links than the original, is more efficient, and has lower costs.

Everyone knows that J.P. Morgan has its own JP Coin and has established 8 core nodes globally. Suppose you are making a cross-border remittance within the J.P. Morgan system, for example, remitting from New York to Hong Kong through the traditional banking system via SWIFT and correspondent banks, the final arrival time may take more than a day; if remitting from Africa, it might even take over a week, plus a fee of 3%. However, now initiating a remittance from New York J.P. Morgan to a Hong Kong J.P. Morgan account only takes 2 minutes, because the remittance is tokenized at the moment of initiation, and when the money actually arrives in Hong Kong, it is converted into fiat USD. This is the new financial market infrastructure, the digital twin.

Currency and Tokenization

Digital twins will start in 2024, and the so-called RWA also belongs to digital twins. In fact, the United States is approaching this from two aspects:

1. Tokenization of the funding side. There are three models for currency tokenization and funding tokenization:

2. Stablecoin. A stablecoin is essentially the tokenization of funds or currencies.

3. Deposit tokenization represented by J.P. Morgan. Besides J.P. Morgan, other banks are also doing this. Last year, HSBC launched a pilot for deposit tokenization in Hong Kong, and the Hong Kong Monetary Authority specifically established a regulatory sandbox for bank deposit tokenization, and everyone is experimenting. Deposit tokenization is also the tokenization of funds or currency.

4. Central Bank Digital Currency (Digital Renminbi). Digital Renminbi also tokenizes currency and funds, whether it is central bank digital currency, deposit tokenization, or stablecoins, the ultimate goal is to tokenize currency/funds. The tokenization of funds/currency is the ultimate goal, and this is an irreversible trend. Everyone is working towards this direction, but it is still unclear which model will ultimately occupy a larger share, making it difficult to judge.

5. Asset Tokenization. Starting from 2024, institutions such as BlackRock, Fidelity, and Franklin Templeton have gradually tokenized different types of funds under their management, such as money market funds, USD bond funds, stock funds, etc. Once the asset-side tokenization reaches a certain scale, in fact, a blockchain financial market system based on new financial infrastructure will be essentially completed. In the next 3–5 years, we are likely to see a blockchain financial market system gradually take shape and achieve a closed loop.

Blockchain, as an emerging financial market infrastructure, is gradually replacing the traditional financial infrastructure.

So, what are the benefits of currency tokenization? Looking at the history of currency development, the credit attributes of currency can basically be summarized into three types:

(1) Natural Attribute Currency. This is the earliest type, during the period before fiat currency appeared, where the credit endorsement of items such as shells, gold, silver, and copper coins originated from their natural attributes. These materials are things birthed by nature, and through refinement and processing by humans, they are endowed with the attributes of currency, thus called natural attribute currency.

(2) Legal attribute currency. Since the emergence of the European Treaty of Westphalia in 1774, sovereign states began to appear and started to legislate certain currencies as their legal tender or sovereign currency, such as the US dollar and the Renminbi. The credit of this type of currency can be seen as granted by law, thus it belongs to the category of legal attribute currency.

(3) Technologically attributed currency. Bitcoin is a currency formed under a complete set of digital technologies, including distributed ledger, digital wallet, cryptography, and consensus algorithm. These digital technologies empower it, allowing it to become a currency form recognized by more and more people. We refer to such currencies formed by technological empowerment as technologically attributed currencies.

The credit attributes of currency are nothing more than these three.

However, tokenized currency is the only currency in the history of human currency to date that possesses dual attributes.

Tokenized currency must first be a form of fiat currency before it becomes a token, thus possessing legal attributes, with an initial legal endorsement, such as the US Dollar stablecoin, which is initially the US Dollar, hence it has legal attributes. When it is minted on the blockchain as a stablecoin, it gains the technical attributes bestowed by technologies such as blockchain, cryptography, consensus algorithms, and digital wallets. Therefore, it is a currency with dual attributes. Compared to single-attribute currencies, dual-attribute currencies are technically more advanced and represent the latest form of currency development.

Recently, Ray Dalio, the retired founder of Bridgewater Associates, stated in an interview that he believes the ultimate currency in the world is gold, and only gold can be called real currency. In essence, fiat currencies such as the US dollar, British pound, euro, and Japanese yen are fundamentally debts based on national credit, and they are still a form of debt that relies on credit issuance.

In addition, someone has written a book titled “The Last Economy,” which has not yet been translated into Chinese. The book mentions that after the development of AI, the economy may come to an end, having reached its peak. The author describes that before the advent of AI, Blockchain, and the Internet, the existence of human wealth was primarily manifested in the rearrangement of atomic structures. For example, firing clay into bricks and then building houses, people believed that houses had value and were a form of storing family wealth, essentially representing a reorganization of atomic structures presented in the form of wealth.

For example, cars are also a transformation and reorganization of atomic structures. Wealth is obtained by transforming atomic structures and is stored in the new atomic structure as a carrier.

And what about Bitcoin? Bitcoin is a new form of wealth that has been created by transforming the bit structure, represented through the rearrangement and combination of the bit structure. Bitcoin, Ethereum, and others belong to this category.

More and more people are realizing that in the digital age, future wealth is likely to be primarily manifested in the reorganization of a bit structure.

As humanity enters the digital age, since the digital revolution of the Fourth Industrial Revolution, the structure of wealth has changed, which also explains why Bitcoin has value. When it was at $100, it was questioned as a scam; when it reached $1,000 and $10,000, there were still doubts. However, as it rose to $100,000, the skepticism gradually decreased, as people began to realize that, in the digital age, future wealth may indeed be primarily represented by the restructuring of Block.

New wealth is nurtured on new financial infrastructure, which is precisely the role that Blockchain plays as a technology born for the AI and digital age. It is a complete set of financial infrastructure created for future new economic structures, new economic organizations, and new forms of wealth.

Why do we need this form of wealth based on the Bit structure? Why is tokenization necessary?

First, the digital economy and the digital age have characteristics that transcend time, space, subjects, and regions. In the digital world, Newton's laws of physics no longer apply. You can “build” a house in the air that accommodates millions of people without laying a foundation. The law of universal gravitation is ineffective in digital space; many physical structures and laws do not work here and have become invalid. Therefore, there must be a new form of wealth and a new way of financial services to represent things and value carriers in digital space, which is precisely why we need tokens, as well as tokenized currencies and tokenized assets based on blockchain restructuring.

(1) Once a token is minted on the blockchain, it inherently possesses global visibility, and anyone in the world can find it on the blockchain, thus it also has global investability. Investors do not necessarily need a bank account; they can invest in other tokens on any chain globally through USDT. Any asset holder hopes that their assets can gain global liquidity and be globally investable.

(2) A new set of financial infrastructure makes settlement more efficient and cost-effective. Any business activity that can be realized with fewer steps, higher efficiency, and lower costs will inevitably replace the original methods that have more steps, lower efficiency, and higher costs; this is basic business logic.

(3) The capital turnover time has been significantly shortened, for example, J.P. Morgan's JP Coin has improved settlement efficiency from 24 hours to 2 minutes.

(4) In the digital age, with the development of open-source hardware, robotics, and AI Agents, as AI begins to create wealth, there will certainly be a demand for payment, collection, and disbursement. The currency of the digital age and the AI era must be programmable currency, with payments between machines completed through smart contracts. Currently, only technologies based on distributed ledgers, digital wallets, and smart contracts can provide a complete programmable currency solution. This is also an important reason for the tokenization of currency, funds, and assets. In the future, assets created by AI will inevitably possess programmable attributes, and the currency required by AI will also be programmable currency.

On the last slide of the PPT, I want to clarify a few concepts. When we talk about tokens, tokenization, digital currencies, and digital assets, we can actually separate them. You must understand which category you are referring to when discussing these topics.

(1) Payment tokens. Stablecoins, or the tokenization of bank deposits and central bank digital currencies mentioned earlier, are collectively referred to as “payment tokens” and are mainly used for payments and settlements. These types of tokens require licenses, and countries are formulating relevant regulatory policies and licenses for stablecoins.

(2) Reserve-type tokens. Represented by Bitcoin as “digital gold”, I believe everyone should be quite familiar with this.

(3) Utility tokens. Also known as “digital oil,” these include tokens like Ethereum and Solana, or other PoS application-oriented tokens. I mentioned this morning that blockchains can actually be divided into two categories: one that does not support applications, and one that does support applications. The type that does not support applications is represented by Bitcoin, while those that do support applications include Ethereum and Solana. The design goal of the latter is to encourage more people to use it, whereas the original intention of Bitcoin's blockchain was to avoid widespread use. In common law countries and regions (such as Hong Kong and the United States), reserve tokens and utility tokens usually do not require approval.

(4) Security tokens. This includes tokenized stocks, bonds, funds, etc. This is the tokenization of financial assets, which also requires approval, must be licensed, compliant, and subject to regulation.

(5) Meme Coins. Represented by Trump Coin, Meme Coins themselves do not possess real value, but may provide emotional value to some extent, similar to the behavior of collecting Labubu trendy toys. Trump is a typical Meme; as a topic figure who was elected as the President of the United States, people around the world pay attention to his new updates on social media every morning, making him particularly suitable for issuing Meme Coins like Trump Coin. Some people spend millions to bid for special editions of Labubu, and similarly, some are willing to purchase Trump Coin. Meme is a cultural phenomenon that refers to personal IP and influencer economy in the Internet era.

Alright, my sharing ends here for today, thank you everyone!