The AFL-CIO, Service Employees International Union (SEIU), American Federation of Teachers (AFT), National Education Association (NEA), and American Federation of State, County and Municipal Employees (AFSCME) coordinated a two-track outreach effort on Friday, May 8. The four unions outside the AFL-CIO sent a joint letter to every sitting senator, while the AFL-CIO sent a separate email directed specifically at members of the Senate Banking Committee. Together, these organizations represent tens of millions of workers and retirees whose pension funds could be directly affected by changes to how crypto assets are regulated in the United States.

The unions argue the 309-page bill would expose pension funds and 401(k) accounts to unacceptable volatility. "This legislation invites the cryptocurrency industry to take outsized risks, knowing that if those risky bets do not pay off, it is working people and retirees, not crypto billionaires, who will pay the price," the SEIU, AFT, NEA, and AFSCME wrote in their joint letter. The AFL-CIO warned separately 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."

What the CLARITY Act Does

The CLARITY Act draws a formal legal boundary between two U.S. regulators: the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Under the current system, crypto projects have faced enforcement actions without clear rules on which agency has jurisdiction. The bill would classify tokens whose value depends on a central team's ongoing work as securities under SEC oversight, while tokens tied to actual blockchain use would fall under CFTC jurisdiction as digital commodities. Centralized exchanges such as Coinbase and Kraken would be required to register as CFTC Digital Commodity Exchanges. Software developers and peer-to-peer activity are largely shielded from oversight requirements.

The House passed its own version of the CLARITY Act 294 to 134 in July 2025, and the Senate is now advancing a separate version through committee markup. Critics have also raised concern that the bill could create a "tokenization loophole" allowing blockchain-based financial products to circumvent traditional SEC oversight, a concern that tracks closely with the unions' broader argument about inadequate investor protections. Coinbase CEO Brian Armstrong, whose exchange would be among those required to register under the bill, said the compromise reflects practical progress: "Not everyone got everything they wanted, but they got the must-haves."

The bill is the second major piece of U.S. crypto legislation in roughly a year. The GENIUS Act, which established rules for stablecoin issuers, passed the Senate 68 to 30 and was signed into law in July 2025. The CLARITY Act covers broader market structure questions the GENIUS Act left unresolved.

A Narrow Political Window

Committee Chair Senator Tim Scott (R-SC) released the bill's text just after midnight on May 12. "This bill reflects serious, good-faith work across the committee and delivers the certainty, safeguards, and accountability Americans deserve," Scott said. Senator Cynthia Lummis (R-WY), a committee member and vocal crypto advocate, added that lawmakers are "closer than ever to getting the CLARITY Act across the finish line."

The political math is tight. Republicans are reported to hold 13 seats on the Senate Banking Committee, and the committee would need all of them to advance the bill without Democratic support, pending verification against the current committee roster. Senator John Kennedy's position remains uncommitted. On the floor, the bill would need 60 votes to clear a filibuster. Prediction market Polymarket put passage odds at 62% as of early May, down from roughly 80% after the stablecoin compromise was reached. Congress enters Memorial Day recess on May 21, and the White House has set a July 4 target for full passage.

The sharpest Democratic objection involves an ethics provision that would bar government officials, including President Trump and his family, from personally profiting from crypto. Senator Elizabeth Warren (D-MA), the committee's ranking member, argued that for most Americans a 401(k) "represents a lifeline to retirement security rather than a playground for financial risk," and accused the bill of putting "investors, our national security and our entire financial system at risk . . . and it will turbocharge Donald Trump's crypto corruption."

This is not the first time major unions have mobilized against crypto legislation. The AFL-CIO previously opposed the Responsible Financial Innovation Act on similar grounds, but the scale and coordination of the current effort, spanning five major unions and targeting both the full Senate and the Banking Committee simultaneously, marks a significant escalation from prior interventions.

Stakes Beyond U.S. Borders

The outcome this week matters far beyond Washington. India ranks first in the 2026 Global Crypto Adoption Index, Nigeria ranks second, and Pakistan sits at eighth, according to one widely cited adoption index. Sub-Saharan Africa recorded $205 billion in on-chain transaction value between July 2024 and June 2025, a 52% year-over-year increase, according to data published by Ripple. Stablecoin usage in the region also grew 180% year-over-year, driven largely by remittances and inflation hedging.

One provision with direct relevance to these markets is the bill's carveout allowing stablecoin issuers to offer rewards tied to remittances and payment transfers, even as it bars interest payments that function like bank deposits. On corridors such as Nigeria to the United States, stablecoin-denominated transfers have become an increasingly common alternative to traditional wire services, and the final rules will shape how U.S. issuers such as Circle and Paxos design their products for these markets. Platforms serving South Asian and African corridors are watching closely to see how those products take shape under the final rules.

Analysts at Citi, as cited by Disruption Banking, project that bill passage could trigger $15 billion in additional Bitcoin ETF inflows and push Bitcoin toward $143,000 in 2026. Bitcoin ETFs recorded $532 million in daily inflows in early May. A failed vote, by contrast, could leave Bitcoin consolidating between $74,000 and $80,000 while regulatory uncertainty keeps institutional capital on the sidelines. That same uncertainty stalls the compliant stablecoin infrastructure that remittance-dependent users in West Africa, East Africa, and South Asia are counting on.

The committee markup begins Thursday at 10:30 a.m. Eastern Time.