AFL-CIO Raises Concerns Over Senate Crypto Regulation Bill
The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) has voiced strong concerns about a Senate bill aimed at regulating the cryptocurrency market. The AFL-CIO, the largest U.S. trade union federation, says the bill lacks key protections for workers and the financial system.
Main Issues Highlighted by AFL-CIO
- The bill could expose retirement funds and pensions to unstable cryptocurrencies.
- It may increase risks to financial stability by allowing banks to hold cryptocurrencies.
- The bill’s tokenization rules might create unregulated “shadow” markets for securities.
In a letter to senators, AFL-CIO Director Jody Calemine warned that the bill could mislead investors. He said it only appears to regulate crypto, which may put workers’ financial security at risk.
Calemine also noted that allowing banks to trade crypto-based hedge funds could pose risks similar to those seen in the 2008 financial crisis. He emphasized that this could threaten the taxpayer-backed Deposit Insurance Fund.
Concerns About Tokenization and Market Oversight
The AFL-CIO criticized the bill’s provisions on asset and security tokenization. The union warned that private companies could create digital tokens for traditional securities. This might lead to a “shadow” market outside the U.S. Securities and Exchange Commission’s (SEC) supervision, reducing investor protections.
Bill Status and Legislative Background
The Responsible Financial Innovation Act (RFIA) was introduced last year by Senators Cynthia Lummis and Kirsten Gillibrand. It remains a draft and has not yet been formally introduced in the Senate.
The AFL-CIO’s opposition highlights the need for strong rules to protect workers and investors in the evolving digital asset space.
