Wall Street Warns Legacy Markets Can't Match Machine Trading

Crypto News

Wall Street and crypto executives warned on May 6 that financial markets are approaching a structural breaking point. The pressure comes from machine-driven trading systems that run around the clock, colliding with infrastructure built for slower, human-operated processes. The remarks came from a panel on the future of capital markets at Consensus 2026 in Miami.

Sandy Kaul, head of digital assets and innovation at Franklin Templeton, said transactions are already moving faster than any human can track. She also said nearly every process in today's capital markets was designed for human operators, and that none of it will hold up as automation scales further.

For decades, financial markets have relied on systems that batch transactions, reconcile records across intermediaries, and settle trades hours or even days after execution. That model traces back to when stock certificates physically changed hands on trading floors. Blockchain infrastructure is now removing those delays by allowing assets to transfer instantly and settle in seconds.

Tokenization Could Eliminate Idle Cash

Panelists pointed to tokenization as the mechanism most likely to drive that transition. Tokenization converts assets such as stocks or money market fund units into digital tokens that can move and settle in real time. Christine Moy, partner at Apollo, described a future in which idle cash disappears from the system. "Every penny of my earnings is fully invested from the moment I earn it to the moment that I spend it," she said.

The same principle extends to corporate treasury management. Companies currently hold cash across multiple accounts in different countries to cover payment obligations. In a tokenized system, those funds could sit in yield-generating assets and convert to payment currency only when a transaction is due. Kaul described this as unwinding a 50-year batch-settlement model and returning to a transaction-by-transaction logic.

Tom Zschach, former chief innovation officer at Swift, said the industry has already solved the transaction problem. What is missing, he said, is a shared governance standard covering ownership, compliance and permissions. "If there's a chance it might not work, it's a non-starter. What institutions need is certainty," he said.

Governance Gap Is the Bigger Obstacle

For large financial institutions, reliability takes precedence over speed. That creates a direct tension with newer DeFi and tokenization platforms that often still lack the legal and operational frameworks that major players consider essential. Competitive pressure is building regardless, as newer platforms offering faster and more flexible financial services create client retention risk for traditional institutions that delay adaptation.

Panelists said the next phase of market evolution will center on rebuilding governance and settlement infrastructure, not only accelerating transaction speeds, to support continuous automated capital flows while maintaining institutional trust.