The largest US federation of trade unions has asked US Senators to reject the Senate’s version of the crypto market structure bill due to serious concerns and a lack of proper safeguards for workers.

Senate’s Crypto Bill Faces Backlash

On Tuesday, Jody Calemine, Director of Government Affairs at The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), sent a letter to the US Senate Banking Committee sharing multiple concerns about the highly anticipated Responsible Financial Innovation Act (RFIA).

Calemine affirmed that the bill “does not protect consumers, workers or the financial system,” arguing that RFIA’s treatment of crypto assets “poses risks to both retirement funds and to the overall financial stability of the U.S. economy.”

According to the letter, the current state of the legislation would enable the crypto industry to “operate in wider and deeper ways” without sufficient oversight or “meaningful safeguards,” which would potentially increase financial instability.

While currently most pensions do not carry crypto assets because of the risks associated with them, the bill provides the facade of regulation that may make cryptocurrency and associated assets more mainstream in portfolios. Passing this legislation will allow the proliferation of assets that investors will wrongly perceive as safe.

The AFL-CIO director warned that the proposed bill also increases systemic risks, as it would expose banks and put the Federal Deposit Insurance Corporation (FDIC)’s taxpayer-backed Deposit Insurance Fund at greater risk.

Additionally, the labor union considers that the legislation “codifies the tokenization of securities and assets such that private companies have a pathway to create a shadow public

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Author: Rubmar Garcia