Unions say Senate crypto bill would risk worker pensions

Five major labor organizations — the AFL-CIO, Service Employees International Union, American Federation of Teachers, National Education Association and American Federation of State, County and Municipal Employees — urged the U.S. Senate to oppose a pending crypto market structure bill in a May 9 letter to lawmakers. The unions said the legislation would jeopardize the stability of workers’ retirement plans, including public pensions, by exposing retirement accounts to significant price swings in cryptocurrencies.

The AFL-CIO followed with an email to members of the Senate Banking Committee on May 9, warning that “absent sufficient regulation, embedding cryptocurrencies … and other digital assets into the real economy will have a destabilizing effect, while benefiting issuers and platforms at the expense of working people.” The federation urged committee members not to advance the bill without added safeguards.

A central dispute in the bill centers on language about stablecoins. Revised text would bar firms from paying yield on payment stablecoins. Some crypto companies have backed that change as a way to limit risky payment products and protect consumers.

Banks and trade groups have objected to parts of the revision. American Bankers Association CEO Rob Nichols wrote to bank executives on May 10 that the stablecoin provision, as drafted, remains insufficient and could “unnecessarily incentivize the flight of bank deposits.”

Not all industry figures oppose the measure. MicroStrategy founder Michael Saylor posted in support of the Senate markup, saying the legislation would promote development of digital capital, credit and equity and noted language recognizing activity-based rewards tied to payment stablecoins and distributed ledger participation.

The Senate Banking Committee’s markup will determine whether lawmakers can resolve competing priorities: limiting risks to retirement savers and the banking system while allowing some crypto-related activity. Lawmakers, unions, banks and crypto firms are preparing for committee debate and potential amendments.