the internet is becoming a capital market

This edition explores how the internet is beginning to acquire the functions of a capital market, as money, financial assets, settlement, collateral and credit move onto programmable rails.

In 1973, 239 banks from 15 countries came together because international finance had outgrown the telex. They needed a common, secure language for cross-border communication, and SWIFT was created. When the network went live four years later, 518 institutions were connected.

SWIFT became one of the great pieces of modern financial infrastructure. But it carries messages, not money. The money remains in bank accounts, which institutions update after receiving instructions. Finance became exceptionally good at transmitting information about money while the money itself continued to sit across separate ledgers.

Compare that with most things we do on the internet. Send a photograph to someone in any part of the world and it arrives almost immediately. Buy software from a company on another continent and use it before leaving the page. A financial transaction may look just as simple, yet beneath that click may sit banks, custodians, payment systems and separate records that have to agree on what happened.

Recently on Unhashed, Nikhil Chandhok, Circle’s head of product and technology, expressed a similar view from another angle. The payment architecture beneath a platform, he argued, influences what eventually gets built above it.

Money has been digital for decades. So have stocks, bonds and fund units. Trading floors became screens and paper certificates became database entries. The interfaces changed dramatically; the underlying coordination model changed far less.

There is a useful parallel in the early electrification of factories. Manufacturers first replaced a central steam engine with a central electric motor while leaving the factory largely intact. The larger gains came later, when factories were redesigned around individual motors and production no longer had to revolve around a central shaft.

Much of finance went through the first stage. We digitised the existing system extremely well, while ownership, cash, trading, custody and settlement remained separate functions maintained by separate institutions. A tokenised bond is not interesting simply because it has another digital representation. The bond was already digital. The change begins when the asset, the money used to purchase it and the rules governing their exchange can operate on compatible programmable infrastructure.

Project Agorá offers one glimpse of this. The BIS, central banks and commercial institutions have been testing tokenised central-bank reserves and commercial-bank deposits in the same programmable environment. In July 2026, 28 participating institutions completed real-value transactions across several currencies, testing whether different monetary claims could settle together on an all-or-nothing basis.

Nikhil described the same direction from the asset side. On Unhashed, he spoke about assets moving to wherever they have the best use, whether that is a trading venue, a lending market or somewhere they can be borrowed against. Today, that can require movement between venues, custodians and accounts built as separate systems.

Broadridge’s Distributed Ledger Repo platform processed an average of $384 billion in repo transactions each day in December 2025, with nearly $9 trillion processed over the month. Repo is a basic funding market through which institutions borrow cash against securities.

Distributed-ledger infrastructure allows some transactions to be structured for precise intraday periods rather than fitting everything into the conventional overnight rhythm. A Treasury can support borrowing for the hours it is needed and become available again when that financing ends.

A similar shift is appearing in collateral. Eligible institutional clients can use shares in BlackRock’s BUIDL tokenised Treasury fund as collateral while the assets remain in regulated custody. A yield-bearing asset does not necessarily have to be sold back into idle cash before supporting another financial activity.

Capital markets do more than transfer ownership. They connect savings with companies and governments that need funding, turn assets into collateral, create credit and move liquidity between uses. Faster settlement helps, but the larger shift comes when money and assets can move between these functions with less operational separation.

Near the end of the Unhashed conversation, Nikhil connected tokenisation to this broader question. He spoke about more capital formation happening through internet-based infrastructure, and about credit systems that could eventually use verifiable economic activity in their lending models.

Taken together, these developments make the idea of an internet capital market less abstract. Money can exist on these networks, securities can be issued and held there, transactions can settle there, and assets can increasingly be financed or pledged without first being converted into something else.

None of this means finance simply migrates onto one blockchain. A bond remains a legal obligation of its issuer. A fund still needs custody. Bankruptcy law, regulation and courts remain attached to jurisdictions. The internet offers a useful precedent: it did not succeed by turning every computer into one computer, but by allowing different systems to communicate through common protocols.

> in practice

At aarnâ, we are working on one part of this shift: bringing access to Indian financial assets onchain through GIFT City, while keeping the legal and regulatory structure of the underlying assets intact.

As more capital market activity moves onto programmable rails, the opportunity is to make ownership, settlement and access work more efficiently across markets. More at aarna.ai

SWIFT solved its original problem remarkably well, becoming part of the backbone of global finance.

The problem being worked on now is different. Stablecoins, tokenised deposits, digital securities and programmable settlement are reducing the distance between a financial instruction and the money or asset to which it refers. Instead of every step becoming another message for another system to process, more of the transaction can happen within the same digital environment.

The internet became a global network for information first, and later a place where commerce itself could happen. Finance has used that network for decades while keeping much of its own machinery underneath. If money, financial assets, collateral and credit can increasingly move and interact through internet-native infrastructure, the internet will be doing something it has never done at meaningful scale before: helping determine not only where information goes, but where capital goes too.

This issue grew out of a conversation with Nikhil Chandhok, Circle’s head of product and technology, on stablecoins, tokenised assets, liquidity, credit and the financial infrastructure being built around them. The full episode is on Unhashed.

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