The American Federation of Teachers (AFT), a major U.S. labor union representing about 1.8 million workers, has formally urged the U.S. Senate to withdraw the Responsible Financial Innovation Act (RFIA), warning that the legislation could mine retirement security for teachers and public-sector employees by exposing pensions and 401(k) plans to volatile crypto assets.
In a letter addressed to the leaders of the Senate Banking Committee, union president Randi Weingarten described the bill as “irresponsible” and “reckless,” arguing that it fails to provide the regulatory guardrails needed to protect working families and could saddle retirement funds with high-risk digital-asset exposures.
What AFT objects to — and why the concern
- The union’s main concern centers on provisions that could permit “tokenization” of traditional securities: non-crypto companies would be allowed to record and trade their stocks on blockchain networks, potentially avoiding longstanding investor protections mandated under securities law.
- AFT argues this loophole could let retirement plans hold “unsafe assets,” even if those plans currently invest only in traditional securities. According to the union, the bill treats crypto and blockchain-based assets as equivalent to established securities — despite crypto’s high volatility and history of fraud and regulatory uncertainty.
- The union warned that the legislation would undermine the safeguards that have historically protected pensions and 401(k) funds, exposing retirees to potentially catastrophic losses if crypto markets crash or regulatory oversight proves ineffective.
Broader arguments — risk to working families and the economy
In its letter, AFT emphasized that the bill does more than threaten pensions: it could destabilize the broader economy by introducing risky and poorly understood assets into long-term retirement savings — funds that hundreds of thousands of Americans rely on to finance their retirement.
The union also criticized what it sees as a failure of RFIA to meaningfully address fraud, illicit activity, and regulatory gaps in anonymous crypto markets — issues that have plagued the crypto industry and contributed to past high-profile collapses.
What this could mean for RFIA’s prospects
With the AFT’s opposition now on record — and joining similar warnings from large labor federations such as AFL-CIO — the political stakes for RFIA have intensified. AFT’s letter signals that any final version of the bill may face strong resistance from organized labor, especially in sectors (like education, healthcare, and public service) where retirement benefits are heavily relied upon.
Whether these concerns prompt revisions to the bill, or derail it entirely, remains to be seen — but the pressure from one of America’s largest unions could sway broader public-policy calculations.
What to watch next
- Whether Senate lawmakers respond to AFT’s letter — and if they propose amendments to explicitly exclude pensions and retirement plans from exposure to crypto assets.
- Reactions from other unions, pension-fund managers and public-sector retirement boards; further opposition could complicate RFIA’s chances.
- How supporters of the bill — including crypto industry advocates — address concerns about pension risk, asset volatility and investor protections as debate moves forward.
Also Check: OCC clears U.S. banks to act as intermediaries in crypto transactions via “riskless principal” model
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