The AFL-CIO, the largest federation of labor unions in the United States, is strongly opposing major crypto legislation currently being considered by Congress. The union’s primary concern is that proposals like the Responsible Financial Innovation Act (RFIA) would put workers’ retirement funds—including 401(k)s and pensions—at significant risk by allowing these plans to hold volatile and largely unregulated crypto assets.

According to the AFL-CIO, the unpredictable nature and frequent price swings of cryptocurrencies such as Bitcoin make them unsuitable for retirement funds, which require stability and carefully regulated oversight to ensure financial security for workers. The union argues that the proposed legislation lacks meaningful safeguards, exposing workers to potential fraud and instability that could threaten their savings.

Additionally, the AFL-CIO warns that the bill would permit FDIC-insured banks to directly trade and hold crypto assets, which could increase the risk of bank failures and put government-backed insurance funds under stress. The labor group draws parallels to the conditions that contributed to the 2008 financial crisis, stating that introducing crypto assets into traditional banking and retirement systems could create similar systemic risks.

A further point of concern involves the bill’s provisions for the tokenization of traditional assets on blockchains. The AFL-CIO believes this could lead to the creation of unregulated “shadow markets,” making it harder for investors to distinguish between regulated and unregulated products and potentially undermining established financial safeguards.

Citing these risks, the AFL-CIO is urging lawmakers to reject the RFIA and similar legislative efforts. Instead, the union advocates for stronger regulatory protections and a cautious approach, ensuring that workers’ savings remain insulated from the unique risks posed by crypto assets and that any financial innovation is accompanied by robust oversight.