The debate surrounding the regulation of digital assets in the U.S. intensified this week as one of the nation's largest labor unions expressed concerns that a proposed cryptocurrency bill could jeopardize retirement savings.
Concurrently, Wall Street is beginning to explore the use of tokenized stocks, a development that unions argue the current legislation fails to adequately address.
Tokenized stocks are digital representations of actual company shares that exist on a blockchain. These digital assets retain the same ownership rights and value as traditional stock.
AFT Raises Concerns Over Crypto Market Bill's Impact on Pensions
The American Federation of Teachers (AFT), representing 1.8 million members, has formally requested the Senate Banking Committee to withdraw the Responsible Financial Innovation Act. In a letter obtained by CNBC, the union described the bill as "as irresponsible as it is reckless."
AFT President Randi Weingarten stated:
"This bill exposes working families… to economic risk and threatens the stability of their retirement security."
Weingarten explained that the bill could permit non-crypto companies to tokenize their stock, potentially bypassing existing securities regulations. This scenario could lead pension plans to unknowingly hold blockchain-issued assets with different risk profiles, even when investing in what appears to be ordinary corporate equity.
She further elaborated:
"This loophole… will have disastrous consequences: Pensions and 401(k) plans will end up having unsafe assets even if they were invested in traditional securities."
Weingarten also contended that the draft bill weakens existing safeguards for cryptocurrencies and diminishes protections for traditional securities, potentially paving the way for future financial crises.
Meanwhile, lawmakers are reporting progress on the legislation. Senator Kirsten Gillibrand stated at the Blockchain Association Policy Summit this week:
"Nothing is holding up this bill."
Tokenized Stocks Introduced as Superstate Facilitates Issuance
While the AFT is raising alarms about stock tokenization, a prominent fintech firm has already launched such a service.
Superstate, founded by Compound creator Robert Leshner, announced its Direct Issuance Programs on Wednesday. This program allows SEC-registered public companies to issue newly created tokenized shares on the Ethereum and Solana blockchains.
The initiative will enable companies to raise capital directly from investors using stablecoins, with tokens settling instantly and shareholder records being updated on-chain.
Superstate CEO Leshner commented:
"Primary issuance needs rails that support instant settlement, transparent participation, and compliance by design - not bolted-on workarounds."
The first offerings of tokenized equity are anticipated to launch in 2026.
This development signifies that the technology the AFT is concerned about is already operational and poised for expansion.
Washington Accelerates Efforts to Finalize Crypto Regulations
The confluence of the AFT's pension concerns, Superstate's new capital-raising platform, and a growing acceptance of tokenization among regulators has created a sense of urgency in Congress to finalize crypto rules.
Senator Cynthia Lummis indicated that the objective is to release a draft bill this week and proceed to a vote next week, as the Senate works to reconcile different versions of the crypto market-structure bill across committees.
However, critics, including the AFT, AFL-CIO, several state regulators, and influential Senate Democrats, argue that tokenized securities require enhanced protections, not fewer.
Proponents highlight that tokenized stocks offer benefits such as faster settlement, reduced costs, and programmable compliance. Unions, conversely, fear that these same features could create vulnerabilities within retirement portfolios.
The current debate is centered at the intersection of these key stakeholders:
- •Unions advocate for robust regulatory safeguards.
- •Companies like Superstate are actively developing the necessary infrastructure.
- •Congress is racing against time to establish rules before the market outpaces regulatory frameworks.
The future trajectory of tokenized equities—whether they evolve into a secure enhancement of traditional finance or pose a new systemic risk—may well depend on the revisions made to the current bill in the coming days.