U. S. Makes Crypto Staking Easier for Investors
The U.S. government has taken significant steps to enhance the accessibility of crypto staking.
New Rules from Treasury and IRS
The Treasury and IRS have released new rules allowing crypto exchange-traded products (ETPs) to stake digital assets and share the rewards with investors. This move removes a major regulatory hurdle that has previously impeded investment in crypto.
Safe Harbor Framework
Before these new rules, there was considerable uncertainty surrounding staking and taxes. The IRS has now established a safe harbor framework that permits trusts to stake digital assets without compromising their tax status. This means that crypto ETPs tracking proof-of-stake assets like Ethereum, Cardano, and Solana can now stake directly and distribute rewards to investors in compliance with tax regulations.
Industry Reactions
Treasury Secretary Scott Bessent highlighted that this move will boost innovation and keep the U.S. at the forefront of digital asset and blockchain technology. Industry leaders have hailed this as a "major win" for crypto funds, anticipating increased staking participation, improved liquidity, and greater decentralization in networks.
Legal and Regulatory Clarifications
This new guidance builds on earlier rules about the taxation of staking rewards and follows the SEC's clarification that protocol-level staking does not violate securities law. Bill Hughes, a senior counsel at Consensys, described this as a "major legal breakthrough" for the sector. Fund managers believe this could accelerate the development of new products in both traditional and digital asset markets.
SEC Clarification on Liquid Staking
The Treasury's move comes after the SEC clarified liquid staking rules in August. The SEC stated that protocol-level staking and "staking receipt tokens" are not under their jurisdiction unless they are part of an investment contract. This clarification was widely praised in the crypto world and seen as a significant step forward for innovation. Now, the Treasury and IRS have further opened the door for regulated staking.