Crypto Industry, Trade Unions Clash Over Multi-Trillion Dollar Retirement Funds
A battle is brewing over the inclusion of cryptocurrencies in multi-trillion dollar retirement funds, pitting the burgeoning crypto industry against powerful trade unions. The central point of contention revolves around proposed legislation that could open the door for pension plans and 401(k)s to invest in digital assets. While the crypto industry views this as a catalyst for growth and wider adoption, labor unions are raising concerns about the risks to workers' retirement security and the stability of the financial system.
The crypto industry sees the integration of crypto assets into retirement funds as a game-changer. Relaxing current regulations for traditional retirement funds and pension plans could unlock trillions of dollars in capital flow into the crypto market. Proponents argue that it would provide diversification benefits, potentially higher returns, and access to a new asset class for retirement savers. Some asset management companies have already signaled their openness to adding digital assets to individual retirement arrangements (IRAs) and 401(k)s.
However, trade unions are fiercely opposing these efforts, citing concerns about the inherent volatility and lack of regulatory oversight in the crypto market. The American Federation of Teachers (AFT), representing 1.8 million members, has voiced strong opposition to the "Responsible Financial Innovation Act," cautioning that it poses "profound risks" to economic stability and retirement plans. The AFT argues that the bill fails to provide a regulatory structure for crypto assets and stablecoins equivalent to that of other pension holdings. They claim that the legislation would allow unsafe assets into pension and 401(k) plans, even if they were invested in traditional securities.
The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), the nation's largest labor federation, has also expressed similar concerns, stating that the Senate's crypto regulation proposal lacks sufficient worker protections and could endanger financial stability. The AFL-CIO believes that the "Responsible Financial Innovation Act" would increase risk exposure through 401(k)s and pension plans and augment the burden on FDIC-backed banks. Jody Calemine, AFL-CIO director, stated that the bill's treatment of crypto assets poses risks to both retirement funds and the overall financial stability of the U.S. economy.
A key point of contention is the provision in some proposed legislation that would allow companies to tokenize stocks and trade them on-chain. Unions fear this could weaken the transparency and reporting mechanisms of existing securities laws, potentially allowing pension funds and 401(k) plans to unknowingly hold unregulated assets. The concern is that tokenizing stocks could create opportunities for regulatory arbitrage, making tracking and law enforcement more difficult and increasing the risk of market manipulation and insider trading.
The debate also extends to existing regulations. In August 2025, former President Trump signed an executive order directing the Labor Department to reevaluate restrictions around alternative assets in defined-contribution plans, including digital assets. This move was seen as a way to potentially open up 401(k)s to crypto investments.
The stakes are high, with trillions of dollars in retirement assets potentially affected. According to the National Association of State Retirement Administrators, aggregate public pension assets totaled more than $6.5 trillion as of the second quarter of 2025. The Investment Company Institute reported that total retirement assets in the U.S. were about $45.8 trillion.
The outcome of this clash between the crypto industry and trade unions will have significant implications for the future of retirement investing and the broader financial landscape. As the debate intensifies, policymakers face the challenge of balancing innovation with the need to protect the retirement savings of millions of Americans.
