The American Federation of Teachers (AFT) has made a strong appeal to Senate leaders, urging them to reconsider the Responsible Financial Innovation Act, a proposed crypto market structure bill. This draft, according to the union, poses significant risks to pension holders and undermines crucial protections for investors.
AFT President Randi Weingarten highlighted that the bill could remove essential safeguards currently in place for traditional securities. He expressed concerns that it would allow tokenized stocks to be traded without the necessary registration or reporting mandated by federal regulations.
This warning comes amid intensifying negotiations surrounding the bill, which have revealed a split among industry groups. Lawmakers have indicated that the chances of the bill advancing may be diminishing.
The AFT represents approximately 1.7 million members, including K-12 educators, faculty in higher education, nurses, and public-sector employees. Weingarten”s letter emphasized that instead of introducing much-needed regulations, the Responsible Financial Innovation Act could expose families—many of whom currently have no ties to the cryptocurrency market—to economic risks that jeopardize their retirement security.
The bill aims to clarify which digital assets fall under the jurisdiction of regulatory bodies like the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). Furthermore, it seeks to create a federal framework for the operation of exchanges, brokers, custodians, and token issuers, establishing uniform standards for registration, disclosure, and consumer protection.
Debate regarding the bill has intensified, particularly as the crypto industry grapples with its own divisions. Some industry stakeholders are advocating for a market structure bill regardless of its implications, while others argue they would prefer no bill than one that imposes unacceptable compromises.
At a recent policy summit held by the Blockchain Association in Washington, D.C., discussions revealed that previously united groups are now openly debating critical issues such as the treatment of decentralized finance (DeFi) and governmental oversight of peer-to-peer transactions. The sentiment among some is shifting towards a cautious approach, prioritizing the integrity of the legislation over hasty passage.
As lawmakers continue to negotiate, there are growing concerns about potential political challenges, particularly with the Supreme Court”s involvement in issues that could impact regulatory authority. Senator Cory Booker voiced apprehension regarding the implications of expanding presidential powers over regulatory commissions, which could stall the bill”s progress significantly.
With many unknowns still surrounding the legislative process, the future of the Responsible Financial Innovation Act remains uncertain, drawing attention from various sectors concerned about the implications for pension security and investor protections.
