• AFT cites profound risks to pensions from unregulated crypto integration.

• The bill builds on the House’s CLARITY Act but fails to address crypto’s inherent instability.

• Public pension assets exceed $6.5 trillion, with total US retirement funds at $45.8 trillion as of Q2 2025, per the National Association of State Retirement Administrators and Investment Company Institute.

Discover why the AFT opposes the crypto market structure bill threatening retirement funds. Explore risks, legislative details, and implications for educators’ pensions in this in-depth analysis.

What is the AFT’s Opposition to the Crypto Market Structure Bill?

The AFT’s opposition to the crypto market structure bill stems from concerns over insufficient regulatory protections for digital assets in retirement plans. In a letter to US Senate Banking Committee leaders, the union highlighted that the Responsible Financial Innovation Act does not impose safeguards equivalent to those for traditional pension holdings. This legislation, which builds on the House’s CLARITY Act, could expose pensions and 401(k) plans to volatile crypto assets, undermining long-term financial security for millions of educators and public servants.

Source: CNBC

How Does the Crypto Market Structure Bill Impact Retirement Funds?

The Responsible Financial Innovation Act aims to establish a framework for digital assets and stablecoins, but critics like the AFT argue it falls short in protecting retirement investments. The bill does not explicitly prohibit crypto in pensions, potentially allowing risky assets into portfolios traditionally focused on stable securities. According to the AFT’s letter, this could lead to “unsafe assets” in plans, even if invested alongside conventional holdings. Data from the National Association of State Retirement Administrators shows aggregate public pension assets, including those for teachers, reached over $6.5 trillion by the second quarter of 2025. Meanwhile, the Investment Company Institute reported total US retirement assets at approximately $45.8 trillion in September 2025, underscoring the massive scale at stake.

Similar worries have been echoed by the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) in an October letter to the same committee. The AFL-CIO warned that the bill could heighten workers’ exposure to crypto by permitting its inclusion in 401(k)s and pensions, posing threats to overall financial stability. The AFT, representing 1.8 million members in education, healthcare, and public services, emphasized that most pensions avoid crypto due to its risks. “This bill fails to provide a regulatory structure for crypto assets and stablecoin that is equivalent to that for other pension holdings,” the letter stated, as reported by CNBC. Experts in financial regulation note that crypto’s volatility—unlike bonds or equities—requires stricter oversight to prevent systemic issues.

The Senate Banking Committee’s July draft of the CLARITY Act and a November draft from the Senate Agriculture Committee omitted direct references to digital assets in retirement funds. Yet, the AFT contends passage could indirectly enable such inclusions, amplifying dangers. This perspective aligns with broader labor concerns, as the AFL-CIO described the legislation as greenlighting “risky assets” in retirement vehicles. Pension fund managers, speaking to financial outlets, have expressed caution, citing historical crypto crashes like those in 2022 that wiped out billions in value. To mitigate these risks, the AFT urges equivalent regulatory standards, ensuring crypto is not falsely portrayed as “stable and mainstream.”

Frequently Asked Questions

What Risks Does the AFT Identify in the Responsible Financial Innovation Act for Pensions?

The AFT highlights that the bill lacks robust regulations for crypto in retirement plans, potentially exposing pensions to high volatility. Unlike traditional assets, crypto faces no equivalent safeguards, risking economic instability and eroding educators’ retirement security, as detailed in their Senate letter.

Why Are Labor Unions Concerned About Crypto in 401(k) Plans?

Labor unions like the AFT and AFL-CIO worry that including crypto in 401(k)s could jeopardize workers’ savings due to its speculative nature. These plans, meant for steady growth, might suffer from market swings, threatening financial stability for millions relying on them for retirement.

Key Takeaways

• AFT’s Stance on Crypto Legislation: The union opposes the bill for failing to regulate digital assets adequately in pensions, prioritizing member security.
• Scale of Retirement Assets: With over $6.5 trillion in public pensions and $45.8 trillion total, any crypto integration could have widespread impacts on US workers.
• Broader Labor Echoes: Groups like the AFL-CIO share concerns, urging stronger protections to avoid increasing exposure to volatile assets.

Conclusion

The AFT’s opposition to the crypto market structure bill underscores critical debates around integrating digital assets into retirement frameworks like pensions and 401(k)s. By highlighting regulatory gaps in the Responsible Financial Innovation Act, the union advocates for safeguards that match traditional investments, protecting economic stability and educators’ futures. As Senate discussions progress, stakeholders must balance innovation with risk management. Stay informed on evolving crypto legislation impacts on retirement funds to make empowered financial decisions.

Trump’s Executive Actions on Crypto in Retirement Plans

Beyond Senate deliberations, President Donald Trump has pursued separate initiatives to incorporate cryptocurrencies into retirement options. In August 2025, he signed an executive order instructing the Labor Department to reassess restrictions on alternative assets, including digital currencies, in defined-contribution plans such as 401(k)s. This move aims to broaden investment choices for individuals, potentially allowing crypto exposure under revised guidelines.

Financial institutions are responding to these policy shifts. For instance, Morgan Stanley began permitting its advisors in October 2025 to recommend crypto-related funds for clients’ retirement portfolios, signaling growing acceptance among major players. State-managed funds in places like Michigan and Wisconsin already hold indirect crypto positions via exchange-traded funds linked to digital assets. These developments contrast with labor unions’ cautions, illustrating a divide between regulatory innovation and protective measures.

The timeline for a full Senate vote on the market structure bill remains uncertain. Wyoming Senator Cynthia Lummis, a vocal supporter, indicated on Tuesday that the Banking Committee might release an updated draft soon, followed by a markup hearing before the holiday recess. This could shape the final legislation’s approach to crypto in retirement contexts. Analysts from financial think tanks emphasize the need for evidence-based rules, drawing on data from past market events to inform balanced policies. As these efforts unfold, the interplay between executive actions, congressional bills, and union advocacy will define the role of crypto in safeguarding American retirement wealth.