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Witnesses tell House panel tokenization, T+0 settlement and agentic AI raise regulatory questions
Summary
Witnesses told the subcommittee that tokenization and instant settlement promise efficiency but raise questions about market structure, 24/5 trading and systemic risk; members also flagged agentic AI trading tools, data privacy, and the need for continuous auditability.
During member questioning, witnesses described tokenization and near‑instant settlement (T+0) as potential efficiency gains but cautioned about structural consequences such as 24/5 trading, competition across trading venues, and the need to ensure market integrity.
Representative Steele asked what risks policymakers should weigh; witnesses pointed to jurisdictional activity in Europe, possible speed‑driven dislocations in market plumbing, and the need for targeted policy work. One industry witness estimated industry‑wide adoption could be "five years or less," while emphasizing significant operational and regulatory coordination would be required.
Separately, members and witnesses discussed agentic AI trading tools offered by brokerages and the risks they pose: potential conflicts of interest if brokers train agents to favor proprietary products, privacy and data‑use concerns if models are trained on customer behaviors, and correlated trading strategies that could amplify volatility. Witnesses urged regulators to clarify liability, require continuous auditing and preserve investor protections for any AI agents that trade on behalf of customers.
The committee did not adopt rules; members asked for further engagement with the SEC, Treasury and industry to address the open questions.
