The American Federation of Teachers (AFT) expressed its concerns this week in a strongly worded letter addressed to Senate Banking Committee Chairman Tim Scott and ranking member Elizabeth Warren.
The union, which represents more than 1.8 million educators and public sector workers, argued that the Responsible Financial Innovation Act (RFIA) does not provide the regulatory clarity and protections for investors that lawmakers have long sought for the digital assets 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 that they are designed to avoid.
"Instead of providing desperately needed regulation and common-sense safety measures, this bill exposes working families (families that currently have no participation or connection to cryptocurrencies) to economic risks and threatens the stability of their retirement security," reads the letter.
A central point of controversy is the treatment that the bill gives to blockchain-based values.
According to the AFT, the RFIA would allow companies outside the cryptocurrency industry to list their shares on a blockchain. This change, according to the union, would allow them to circumvent traditional regulations on securities.
The AFT also warned that such a change would weaken safeguards like mandatory disclosure, registration standards, and oversight of intermediaries. These protections are crucial for protecting pension funds against fraud and mismanagement.
By reducing these barriers, the AFT believes that the bill blurs the line between regulated securities and unregulated digital assets. This could leave long-term retirement portfolios more vulnerable to market instability.
This is not the first time that unions have expressed their concerns about the RFIA, following a similar warning from the AFL-CIO in October about risks to pensions and financial stability.
The union's warning comes as Congress struggles to create a unified regulatory framework for digital assets.
