Strategy CEO Phong Le: SEC's Five-Year Pilot May Become Long-Term Market Norm
Strategy CEO Phong Le shared the U.S. Securities and Exchange Commission's announcement regarding the pilot trading of tokenized securities in licensed automated market makers and liquidity pools. He stated that once investors experience a "faster, more modern, and perpetually open" market over the next five years, this model is likely to become a long-term norm, making it difficult for the market to revert to the old structure characterized by limited trading hours and specific regulatory influences.
On the same day, the Commission issued an "innovation exemption" order: a temporary, conditional exemption for trading venues of tokenized securities from being classified as "exchanges" under the Securities Exchange Act of 1934, allowing them to trade tokenized national market system stocks using licensed automated market makers and liquidity pools. Additionally, certain participants providing liquidity for tokenized stocks in the pool with their own funds are temporarily exempt from being classified as "market makers." The exemption is set to expire five years from the announcement and is open for comments. Chairman Paul Atkins stated that this is a step to bring U.S. capital markets into the digital age within statutory authority.
The venues must be U.S.-based, participants must be authorized to trade, and contracts must be deployed on public permissionless chains in licensed pools. The underlying assets must be 1:1 corresponding, with voting rights, dividends, and proxy rights, while synthetic instruments are prohibited; issuers must be notified and can opt out. Venues are required to disclose operations and related transactions, maintain books, coordinate trading halts, and meet technical security standards. Code and trading volume are subject to limits based on price fluctuations. Jamie Selway, Director of the Trading Markets Division, stated that they can assist entities interested in operating venues. Commissioner Mark Uyeda described this move as a data collection for subsequent rule-making.
On the same day, the Commission held a roundtable on around-the-clock trading. Nasdaq has already extended its daytime trading to about 23 hours. The exemption does not cover synthetic stock tokens on overseas platforms. Custodial trust companies previously received a no-action letter for a three-year tokenization pilot, allowing participant wallets to transfer among each other outside of business hours.
Mechanically, this shifts U.S. stocks from seat-based matching to on-chain pools: buying involves inventory management that can be traded overnight and on weekends, while selling requires waiting for market opening and T+1 margin occupation. Beneficiaries include infrastructure capable of licensed pools and tokenized custody; those under pressure include intermediaries relying on time-segmented survival and offshore markets treating synthetic stocks as U.S. stocks. The five-year sunset clause indicates this is an observation window, not a permanent shift. Once investors become accustomed to perpetual trading, the political cost will shift from "should we open" to "how do we close."
Additionally, the Clarity Act did not advance in the Senate recently, and the Commission stated that the exemption serves as a transit station before rules or legislation. Protocols like Uniswap emphasize that only licensed pools fall within the scope.
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Le directly describes the five-year pilot as an irreversible experience, which is the next step after Strategy consistently views Bitcoin as a reserve asset: the market structure itself must also be 24/7. After rebranding from MicroStrategy to Strategy, its balance sheet is now tied to on-chain dollars and Bitcoin; if U.S. stocks can be held overnight in pools, company holdings and financing windows will no longer be interrupted by the NYSE bell. His emphasis on "difficulty returning to the old structure" bets on user habits being more resilient than the five-year sunset clause.
Capital will first flow into licensed pools for market making and tokenized custody, rather than immediately dismantling exchange matching. The issuer's opt-out right turns blue-chip tokenization into an optional menu, not a mandatory on-chain requirement. Prohibiting synthetic stocks separates offshore mirrors from U.S. equity rights, avoiding bifurcation of voting rights and dividends on two tracks. ATS and market maker exemptions reduce licensing friction for the first batch of venues, but code restrictions and price fluctuation limits indicate the Commission still manages on-chain pools according to national market system volatility tools.
In comparison to the DTCC's three-year pilot, Nasdaq's extended hours, and the emergence of tokenized funds in Europe and Asia, the industry phase is a parallel experiment between traditional time-segmented markets and perpetual on-chain markets. Whoever first allows pensions and market makers to place inventory into licensed pools will define "real stock tokens" rather than "shadow stocks." Synthetic trading is excluded, which is a short-term negative for the narrative of on-chain U.S. stocks but a long-term positive for accessing issuer-authorized channels.
The structure is driven by regulatory changes prompting a reconstruction of trading hours. Stock trading rights were previously tied to business hours and national market system membership; the exemption temporarily removes matching algorithms and liquidity pools from the definition of "exchanges." The mechanism is that once investors react to macro news over the weekend, the weekday opening becomes about filling gaps rather than price discovery; withdrawing perpetual trading after five years would mean reclaiming established hedging habits. Regulation uses temporary orders to exchange data, while the market uses habits to exchange for a permanent track.
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- Investors become accustomed to perpetual trading, making it difficult for the sunset clause to take effect.
- Real stocks on-chain sell complete rights, not shadow prices.
- First exempting the definition of "exchange" allows pools to legally operate overnight.