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The U.S. Treasury and Internal Revenue Service (IRS) have formally sanctioned staking for cryptocurrency exchange-traded funds (ETFs), signifying a significant milestone for digital asset investment.
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The recent guidance, published under Revenue Procedure 2025-31, permits ETFs and trusts that possess proof-of-stake (PoS) assets like Ethereum (ETH) and Solana (SOL) to stake their holdings, directly distributing staking rewards to investors, without risking their tax status.
U.S. Treasury Enables Crypto ETF Staking
Treasury Secretary Scott Bessent characterized the advancements as a pivotal move in maintaining the U.S. as a leader in blockchain innovation.
The framework introduces a “safe harbor” for regulated funds, clarifying the taxation and distribution of staking rewards. Investors will only incur taxes when they claim the rewards, while the ETFs themselves do not face taxation at the trust level.
Industry specialists applauded the ruling as the final element of regulatory clarity needed to encourage institutional engagement in staking. Analysts predict that the adjustment could attract between $3 billion and $6 billion in fresh inflows toward staking-based crypto products over the next year.
BTC's value trends downward on the daily chart. Source: BTCUSD on Tradingview
Rigorous Compliance Regulations for Fund Managers
To qualify under the updated framework, ETFs are required to fulfill specific criteria. Funds are limited to possessing a single digital asset alongside cash, must collaborate with certified custodians for key management, and engage independent staking service providers to oversee validator functions.
This structure guarantees investor safety while connecting conventional finance with decentralized blockchain frameworks. It reflects prior SEC approvals from September 2025, which clarified listing regulations for crypto ETFs and confirmed that certain staking activities do not qualify as unregistered securities.
Bill Hughes, senior counsel at Consensys, mentioned that the policy “removes the largest legal and tax uncertainty that has prevented institutions from integrating staking into regulated offerings.”
The guidance, he noted, empowers fund sponsors to provide yield-generating ETFs that produce passive income for investors through network validation.
Shifting from Policy Ambiguity to Passive Earnings
Up to this point, U.S. fund managers had sidestepped staking due to regulatory uncertainties and the risk of losing favorable tax treatment. With this guidance, both retail and institutional investors can attain 3–7% yearly staking rewards on assets such as ETH and SOL through ETFs, without operating their own nodes or managing wallets.
The revelation follows weeks of governmental inactivity during the unprecedented 40-day U.S. shutdown, making it one of the initial significant regulatory measures since the reopening. It signals a resurgence in policy momentum and a wider acceptance of digital assets by Washington.
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Analysts believe this move solidifies America’s status as a global frontrunner in digital asset regulation, potentially triggering a new wave of staking-enabled ETFs from financial powerhouses like BlackRock and Fidelity.
Cover image from ChatGPT, BTCUSD chart from Tradingview
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