AFT Teachers Union Warns Senate Crypto Bill Risks Pensions
The American Federation of Teachers (AFT) has urged the US Senate Banking Committee to reject pending digital asset market structure legislation, warning it could jeopardize the stability of educators’ retirement savings. In a letter sent Monday to the committee’s Republican and Democratic leaders and provided to CNBC, the union opposed the Responsible Financial Innovation Act, which senators have said builds on the House of Representatives’ CLARITY Act.
The AFT said the proposal poses “profound risks” to economic stability and retirement plans, arguing it does not establish safeguards for crypto assets and stablecoins comparable to those governing other pension investments. The union noted that most pensions avoid crypto due to risk and contended the bill treats digital assets as stable and mainstream.
The CLARITY Act, a July draft from the Senate Banking Committee, and a November draft from the Senate Agriculture Committee did not specifically authorize digital assets for use in pensions or retirement funds. Nonetheless, the AFT argued that, if enacted, the legislation could result in pensions and 401(k) plans holding unsafe assets even when investing through traditional securities.
The American Federation of Labor and Congress of Industrial Organizations raised similar objections in an October letter to the Banking Committee, warning the bill could heighten risks to retirement funds and broader US financial stability by effectively permitting 401(k) plans and pensions to hold digital assets.
The AFT represents 1.8 million members across education, healthcare, and public services. Aggregate public pension assets, including teachers, totaled more than $6.5 trillion as of the second quarter of 2025, according to the National Association of State Retirement Administrators. The Investment Company Institute reported in September that total US retirement assets were about $45.8 trillion.
Trump moves to address crypto in retirement plans via executive action
Separately from the Senate’s market-structure efforts, President Donald Trump in August signed an executive order directing the Labor Department to reassess restrictions on alternative assets in defined-contribution plans, including digital assets.
Asset managers have signaled openness to incorporating digital assets into individual retirement arrangements (IRAs) and 401(k)s. In October, Morgan Stanley reportedly began allowing advisers to recommend crypto funds within clients’ retirement portfolios. Some state-managed plans, including in Michigan and Wisconsin, have exposure to crypto via digital asset-linked exchange-traded funds.
The timing for a Senate floor vote on a market structure bill remains uncertain. On Tuesday, Senator Cynthia Lummis said she expected the Banking Committee to release an updated draft this week, with a potential markup before Congress recesses for the holidays.
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