The US IRS is opening a staking path for crypto ETFs to get in on the yield without the tax headache
A new one Safe Harbor is announced by the US Internal Revenue Service Monday is seen as a major step towards allowing Crypto Exchange traded products (ETP) to share staking rewards with their investors.
Under certain conditions, the new guidance allows trusts to “promote their digital assets without jeopardizing their tax status as investment trusts and trusts for federal income tax purposes,” according to the IRS document, which has since become public. Under proof-of-stake consensus mechanisms, network participants stake or “stake” some of their cryptos—Ethereum or another crypto – to secure the network, and they get a return for that.
Treasury Secretary Scott Bessent Posted on social media site x That policy “gives crypto exchange traded products (ETP) a clear path to stake digital assets and share staking rewards with their retail investors.”
He said it “increases investor benefits, fosters innovation, and keeps America the global leader in digital assets and blockchain technology,” echoing President Donald Trump’s usual sentiment and his vows that the US will become a world leader in crypto.
“This effectively removes a major legal barrier that has discouraged fund sponsors, custodians, and asset managers from including yield staking in regulated investment products,” said Bill Hughes, Consensys Senior Counsel and Director of Global Regulatory Matters, in his own post With X. “More regulated entities can now stake on behalf of investors, likely increasing staking participation, liquidity, and network decentralization.”
Staking has been a hanging question since the advent of Crypto Exchange traded products (ETF), which brought a new wave of digital assets investment. The practice has come up in conversations across a range of crypto police debates, and was cleared by the Securities and Exchange Commission earlier this year. does not run on securities law.
Read more: Crypto Coalition Tells SEC Staking Is ‘Essentially Good,’ Not a Security
The IRS guidance is targeted at permissionless proof-of-stake networks.
“The impact on staking adoption should be significant,” Hughes said, saying the guidance “provides long-awaited regulatory and tax clarity.”
The IRS’s crypto office has been through significant recent leadership turnover, losing a series of managers this year as the Trump administration slashed staff and resources at the tax agency. The IRS did not respond to media inquiries asking if the office was still operating as before.
Read more: IRS Chief Crypto Work Comes Out as US Taxes Change for Digital Assets
