The American Federation of Teachers (AFT) has urged the Senate to abandon the Responsible Financial Innovation Act, often described as the crypto market structure bill, warning that it could endanger teacher pensions and other retirement plans. Representing roughly 1.7–1.8 million members, the union framed the debate as a clash between tokenization-driven innovation and long-term retirement security. AFT President Randi Weingarten called the draft legislation ‘as irresponsible as it is reckless’, underscoring the stakes for fiduciary-managed portfolios.
Tokenization and pension exposure
The union’s central technical objection targets a tokenization provision that would allow traditional equity and financial instruments to be placed on blockchain networks. Tokenization, defined as creating a digital representation of a real-world asset on a distributed ledger, is, according to the AFT, a pathway that could enable non-crypto firms to operate outside the existing securities regulatory framework, producing a regulatory mismatch that could contaminate pensions and 401(k) portfolios with assets subject to different disclosure and oversight standards.
The concern is operational for pension funds governed by fiduciary duties, which expect assets with established audit trails, disclosure requirements and counterparty accountability. As criticized by the AFT, the bill’s language could weaken those expectations, increasing counterparty risk and reducing traceability for asset provenance. The union warns such a shift raises the probability of fraud and unethical practices entering retirement plans without clear notice to beneficiaries.
Political and regulatory stakes for the Crypto Market Structure Bill
Beyond tokenization, the bill proposes a jurisdictional realignment by classifying certain digital assets as ‘digital commodities’, which would transfer primary oversight from the SEC to the CFTC. ‘Digital commodity’ here refers to a classification intended to put some crypto assets under commodities-style regulation rather than securities law, a reclassification that the AFT argues would produce regulatory gaps and dilute investor protections designed to prevent market manipulation and opaque issuance.
Supporters of the bill include Senators Cynthia Lummis, Bernie Moreno and Senate Banking Committee Chair Tim Scott, and it has attracted lobbying interest from major financial institutions. Opponents include Senator Elizabeth Warren and consumer advocates; passage requires at least seven Democratic votes, a threshold that backers have yet to secure. Senator Mark Warner summarized the difficulty as being ‘in crypto hell’ while negotiating the measure, underscoring the depth of intra-party friction.
The union has allied with broader labor voices, including the AFL-CIO, to emphasize the human cost: teachers, nurses and public-sector workers whose retirement security depends on stable, well-regulated investment vehicles. Industry proponents, including asset-management advocates who promote tokenization, frame the change as innovation that could improve liquidity and fractional ownership, but the AFT and some lawmakers see a potential trade-off that reduces longstanding investor safeguards.
The AFT’s intervention reframes the market-structure debate as a question of pension safety versus technological accommodation, spotlighting tokenization and jurisdictional shifts as the primary vectors of exposure. The next milestone is whether bill sponsors can secure the necessary seven Democratic votes in the coming weeks; that outcome will determine whether tokenization ambitions proceed amid unresolved safeguards for retirement accounts.