Dear Senator:
On behalf of the AFL-CIO, I am writing to voice our opposition to the Senate version of the House’s CLARITY Act. The bill’s approach to regulating digital assets remains structurally flawed, and we continue to urge Senators to oppose it in the markup scheduled for May 14, 2026 and any similar legislation coming to the Senate floor. We are deeply concerned that this bill will prompt a flood of digital assets into pension plans, retirement accounts, and our broader financial system under an ineffective regulatory system. While this will make a small number of wealthy people even wealthier, it puts the rest of us at risk.
The digital asset market structure bill has been the subject of intense negotiations between the cryptocurrency industry and the banking industry. Those talks have focused on issues important to those industries' interests. Working people have not had a seat at the table. That’s because their pensions appear to be on the menu.
Press reports indicate the dinner bell is ringing. The White House’s top crypto advisor told Bitcoin 2026 in Las Vegas in April that crypto “will take off like a rocket ship” when the CLARITY Act passes. The same article notes: “The CLARITY Act will unlock something specific. Right now, sovereign wealth funds and pension funds – institutions managing trillions of dollars combined – can’t legally hold most crypto assets because their compliance teams won’t sign off without federal classification. The bill will provide exactly that.”1 To put it another way, the CLARITY Act will allow crypto billionaires to cash out of these volatile digital assets by feasting on our pension plans. And this bill is not the only effort underway to feed retirement money to crypto billionaires. The Trump Department of Labor proposed a new rule in March to make it easier for 401(k) plans to invest in crypto. Writing about the rule, crypto industry press said, “The stakes for crypto could be large. U.S. 401(k) plans hold trillions of dollars in retirement savings, and even a small shift into digital assets could send new capital into the market.”2 The diners are salivating.
It is working people who will get hit first and hit hardest when the financial system is destabilized or when our pensions and retirement accounts are stuffed with the erratic and underregulated assets which this bill would mainstream. We know this from experience. The 2008 financial crisis was due to that era’s financial “innovations," like credit default swaps. With the CLARITY Act, crypto is the latest innovation seeking to skirt proper oversight. Strings of numbers in cyberspace, crypto – with names like Trumpcoin and Whalepanda – has been called “pointless” and an asset with “almost zero legal use cases,” although “it’s pretty good for scammers.”3 This bill paves the way for our retirement accounts to be at their mercy.
One example of the new risks created by this bill for working people is the tokenization of securities, which the bill codifies. Tokenization would incentivize companies to fundraise with a new form of shadow stock that would exist outside of SEC oversight. These blockchain-based shadow stocks, notionally tied to the traditional public stock but trading independently, would create new risks both for the holder of the shadow stock but also the public stockholders, including pension and 401(k) plans, who did not opt into this new poorly regulated securities market. We are deeply concerned about the impact this potential shadow stock trading would have on the stability of the traditional financial markets as well as their impact on retirement plans, even those plans that do not ever invest in crypto. While retirement plans rely upon proper regulation of their underlying investments, including protection against fraud, conflicts of interest, and other unethical practices, this bill substantially weakens both federal and state enforcement tools to police these practices.
Additionally, proposals we have seen for this bill would expand the ability of FDIC-backed banks and bank holding companies to hold otherwise prohibited assets not just on behalf of their clients because they have been put on the blockchain. Having these digital assets on their balance sheets not only exposes banks to heightened risk of losses and failures, but it also puts the FDIC’s Deposit Insurance Fund at greater risk.
If a deal has been struck between the banking and crypto industries, that is no reason to rush. There are more parties to bring to the table. Hundreds of millions of working people have an interest here. Among other things, our pensions should not be on billionaires’ menus. The AFL-CIO strongly urges you to oppose the Responsible Financial Innovation Act.
Sincerely,
Jody Calemine
Director, Government Affairs
1 Sam Daodu, White House Says Crypto Will “Take Off Like a Rocket Ship” Once CLARITY Act Passes: Is It Buy the Rumor, Sell the News? Yahoo! Finance, April 29, 2026.
2 Helene Braun, U.S. Rule May Open Trillions in 401(k) Funds to Crypto, Coindesk, March 30, 2026.
3 Jared Bernstein, “Jared Bernstein on crypto: An asset with ‘almost zero legal use cases,’ pretty good for scammers,” CNBC Money Movers, February 26, 2026.