US Labor Union Warns Senate Crypto Bill Risks Workers’ Funds 💼
The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) — the largest labor union federation in the United States — has voiced strong opposition to the Senate’s crypto regulation bill, claiming it fails to protect workers and could expose retirement savings to risky assets.
AFL-CIO Raises “Serious Concerns” ⚠️
In a letter to the Senate Banking Committee, AFL-CIO policy director Jody Calemine said the draft version of the Responsible Financial Innovation Act (RFIA) “poses risks to both retirement funds and the overall stability of the US financial system.”
He criticized the bill for allowing the crypto industry to operate more deeply within traditional finance without proper oversight or safeguards, warning that such moves could endanger everyday workers’ savings.
The Bill: A “Facade of Regulation” 🧱
The RFIA, introduced by Senators Cynthia Lummis and Kirsten Gillibrand, aims to establish a clearer federal framework for crypto regulation. However, the AFL-CIO argues that the bill merely “provides the facade of regulation” and could backfire by allowing retirement accounts like 401(k)s and pensions to hold volatile crypto assets.
Calemine emphasized that while the union supports modernizing financial rules, “this legislation increases, rather than reduces, worker exposure to crypto market instability.”
Potential Systemic Risks 💣
The AFL-CIO also warned that the bill could put the Deposit Insurance Fund — the taxpayer-backed reserve that protects bank deposits — at greater risk if banks are allowed to custody digital assets.
Additionally, the legislation could enable tokenization of securities in ways that allow private companies to issue “shadow public stocks” without proper Securities and Exchange Commission (SEC) oversight.
Echoes of the 2008 Financial Crisis 📉
Calemine compared these risks to the high-risk banking practices that led to the 2008 financial crisis. He warned that crypto-based hedge fund trading by banks, which would be permitted under this bill, could “be even riskier than pre-crisis activities.”
He urged lawmakers to oppose the RFIA, which remains a draft and has yet to be formally introduced.
Conclusion 💡
The AFL-CIO’s opposition adds new pressure to the ongoing debate over how the US should regulate digital assets. While crypto advocates push for innovation, labor unions are demanding stronger worker protections and financial safeguards to prevent another systemic crisis.
Stay updated with the latest crypto legislation news at 👉 CryptoDice News
