US Teachers’ Federation Criticizes Cryptocurrency Bill

US Teachers' Federation urges Senate to withdraw crypto bill, citing pension risks.

The American Federation of Teachers (AFT) has urged the US Senate to withdraw the “Responsible Financial Innovation Act.” The organization highlighted risks to pension savings and the national economy.

AFT President Randi Weingarten sent a letter to lawmakers criticizing the bipartisan initiative. In her view, the bill fails to provide protection against the threats inherent in digital assets and stablecoins.

Weingarten emphasized that instead of necessary regulation, the document endangers families not even involved with cryptocurrencies.

The union’s main concern is the potential tokenization of stocks on the blockchain. 

This would allow companies to bypass existing securities laws, avoiding registration and reporting requirements.

The AFT believes such a loophole would lead to unverified assets appearing in pension plans and 401(k) accounts. Even if portfolios consist of traditional instruments, the lack of oversight creates risks for investors.

The authors of the letter also noted that the bill does little to address illegal activities in the industry. Regulatory gaps could trigger the “next financial crisis.”

The “Responsible Financial Innovation Act” was introduced by Senators Cynthia Lummis and Kirsten Gillibrand. The document defines digital assets and allocates oversight functions between the SEC and the CFTC. The Senate is expected to consider the updated version of the bill next week.

Earlier, the Commodity Futures Trading Commission launched a pilot program using digital assets as collateral in derivatives markets.