The main union of American teachers issues a warning about cryptocurrencies related to pensions

The American Federation of Teachers (AFT) sent a letter to the leaders of the Senate Banking Committee warning that the proposed changes to the legislative framework would legitimize cryptocurrency markets while weakening investor protections, thereby putting teachers' pension funds at greater risk.

The union argues that this change could expose pension funds to unsecured assets and increase the risks of fraud and financial instability.

The union states that the RFIA endangers retirement

The AFT expressed its concerns this week in a strongly worded letter addressed to the chairman of the Senate Banking Committee, Tim Scott, and ranking member Elizabeth Warren.

The union, which represents over 1.8 million educators and public sector workers, argued that the Responsible Financial Innovation Act (RFIA) fails to provide the regulatory clarity and investor protections that lawmakers have long sought for the digital asset sector.

The AFT added that the bill would normalize crypto assets without addressing their volatility. It warned that this approach could expose retirement systems to risks they are meant to avoid.

"Rather than providing desperately needed regulations and sensible safeguards, this bill exposes working families - families with no current link to or connection to cryptocurrency - to economic risk and threatens the stability of their retirement security," the letter stated.

A central point of contention is the treatment of blockchain-based securities by the bill.

Pension protections threatened

According to the AFT, the RFIA would allow companies outside the crypto industry to list their stocks on a blockchain.