A US labor organization has warned that a new Senate proposal aimed at regulating digital assets may leave workers and the financial system more vulnerable.
On October 7, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) submitted a letter to the Senate Banking Committee outlining its objections to the draft version of the Responsible Financial Innovation Act (RFIA).
According to the union, the bill does not offer strong enough protections and may encourage financial practices that place retirement savings at greater risk.
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The AFL-CIO argued that the bill’s approach to crypto oversight would allow these assets to become more involved in financial systems without appropriate checks.
Jody Calemine, the federation’s policy director, stated that the legislation could make it easier for crypto companies to expand their presence while avoiding important regulatory steps.
However, the union noted that the bill could lead to risky investments being included in retirement plans such as pensions or 401(k)s.
There is also concern over how the bill might affect federal insurance programs. If banks are allowed to hold crypto on behalf of customers, the union said this could place added strain on the Deposit Insurance Fund, which is designed to protect consumer deposits.
Additionally, the AFL-CIO pointed to a provision in the bill that would allow companies to issue tokenized versions of financial assets without being fully subject to the rules enforced by the Securities and Exchange Commission (SEC).
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