The AFL-CIO, the largest labor federation in the United States, sent a letter on Monday to members of the Senate Banking Committee opposing the draft Responsible Financial Innovation Act (RFIA), a bill aimed at creating a regulatory framework for digital asset trading. Jody Calemine, Chief Legal Officer of the AFL-CIO, expressed deep concerns in the letter, stating that the bill could expose workers' retirement funds, such as 401(k)s and pensions, to volatile crypto assets, threatening the overall financial stability of the U.S. economy.
The RFIA, first introduced in 2022 by Senators Cynthia Lummis and Kirsten Gillibrand, includes provisions to exempt NFTs and Decentralized Physical Infrastructure Networks (DePIN) from registration and business operator regulations. It would also establish a CFTC-SEC Micro-Innovation Sandbox, allowing startups to operate under regulatory exemptions for two to three years. However, the AFL-CIO argues that the bill lacks sufficient oversight and could enable banks to custody cryptocurrencies, potentially risking the taxpayer-backed Deposit Insurance Fund and encouraging high-risk activities reminiscent of the 2008 financial crisis.
In a previous letter in July, the AFL-CIO urged Democratic lawmakers to ensure clear investor and worker protections or vote against the bill, leading to reservations from some candidates. With significant political influence, the union's opposition could delay the bill's passage, hindering market growth. Senator John Kennedy, a senior Republican on the committee, has also cautioned against rushing crypto market structure legislation, echoing concerns over inadequate safeguards.