Teachers union warns senate that crypto rules could put retirement savings at risk
The American Federation of Teachers (AFT), which represents nearly two million educators and public-sector workers across the country, has urged U.S. lawmakers to rethink a major crypto market structure bill. In a letter sent Monday to both Republican and Democratic leaders on the Senate Banking Committee, the union warned that the legislation could jeopardize the long-term security of workers’ retirement savings.
The bill in question — the Responsible Financial Innovation Act — is being positioned in the Senate as a follow-up to the House’s CLARITY Act. But the AFT argues that the proposal glosses over the risks tied to digital assets. According to the union, the bill treats crypto like traditional, stable investments even though most pension funds avoid crypto entirely because of its volatility.
“This bill fails to provide a regulatory structure for crypto assets and stablecoins that is equivalent to rules for other pension investments,” the union wrote. They added that passing it could open the door for “unsafe assets” to wind up in pensions and 401(k)s, even if those funds are invested in otherwise conventional securities.
Their stance echoes concerns raised earlier by the AFL-CIO, which warned in October that the bill could expose workers’ retirement accounts — and the broader U.S. financial system — to unnecessary risks.
The stakes are large: public pension systems, including those for teachers, hold more than $6.5 trillion in assets. Across the entire U.S. retirement landscape, total savings amount to over $45 trillion.
Meanwhile, the White House is pursuing its own approach. President Donald Trump moved in August to expand the types of investments allowed in 401(k) plans, signing an executive order that directs the Labor Department to revisit restrictions on alternative assets such as cryptocurrencies.
Some financial institutions have already begun adapting. Morgan Stanley has reportedly allowed advisors to recommend certain crypto funds for retirement portfolios, and a handful of state-run pension systems — including Michigan and Wisconsin — hold exposure through crypto-linked ETFs.
As for the Senate’s market-structure bill, timing remains uncertain. Senator Cynthia Lummis of Wyoming, one of the legislation’s strongest supporters, said this week that lawmakers may release an updated version soon, with the possibility of a markup hearing before Congress adjourns for the holidays.
