Ethereum News Today: Safe Harbor for Staking: US Clears Path for 7% Yields in Crypto ETFs

The U.S. Treasury Department and Internal Revenue Service (IRS) have issued groundbreaking guidance allowing cryptocurrency exchange-traded funds (ETFs) and trusts to stake digital assets and distribute rewards to investors, marking a pivotal shift in institutional crypto adoption IRS Guidance May Allow Ethereum ETF Staking Rewards Without Tax Risks. The new rules, outlined in Revenue Procedure 2025-31, establish a "safe harbor" framework that resolves long-standing tax and regulatory uncertainties surrounding staking activities, particularly for proof-of-stake (PoS) networks like Ethereum and Solana Staking Gets Tax Clarity: New US Rules Let ETFs Share Rewards With Investors. This development enables Wall Street products to offer yields of up to 7% annually, a feature previously restricted due to fears of SEC scrutiny over unregistered securities Ethereum, Solana ETFs Get Green Light for Staking via US Treasury, IRS Crypto Fund Guidance.

Under the guidance, crypto trusts must adhere to specific criteria to qualify for the safe harbor. These include holding only one type of digital asset from a permissionless PoS network, using a qualified custodian for key management, and maintaining liquidity protocols to ensure smooth redemptions Staking Gets Tax Clarity: New US Rules Let ETFs Share Rewards With Investors. Trusts are also prohibited from engaging in activities beyond staking, holding, and redeeming assets, effectively insulating them from securities law violations. Treasury Secretary Scott Bessent emphasized that the policy "boosts innovation and keeps America the global leader in digital asset and blockchain technology" US Treasury and IRS Open Safe Harbor for Crypto Staking in ETFs.

The move addresses a critical gap in prior regulations, where the SEC's ambiguous stance on staking rewards—viewing them as potential profits from others' efforts—discouraged institutional participation Ethereum, Solana ETFs Get Green Light for Staking via US Treasury, IRS Crypto Fund Guidance. For example, spot Ethereum ETFs approved last year excluded staking to avoid regulatory risks, but recent actions, such as Grayscale's launch of ETH staking services, signal a thawing of attitudes Ethereum, Solana ETFs Get Green Light for Staking via US Treasury, IRS Crypto Fund Guidance. The new rules provide clarity by treating staking rewards as taxable income for trusts, which are then distributed to investors in compliance with existing tax frameworks IRS Guidance May Enable Staking in Crypto Exchange-Traded Products.

Industry experts have hailed the guidance as a "game changer." Bill Hughes, head of global regulation at Consensys, noted that the safe harbor "removes a major legal barrier" for fund sponsors and custodians, enabling them to integrate staking yields into regulated products Ethereum, Solana ETFs Get Green Light for Staking via US Treasury, IRS Crypto Fund Guidance. This clarity is expected to accelerate mainstream adoption of PoS blockchains, with Ethereum's staking participation already exceeding 30 million ETH and Solana offering higher, albeit more volatile, yields Ethereum, Solana ETFs Get Green Light for Staking via US Treasury, IRS Crypto Fund Guidance. Analysts predict a surge in institutional capital flowing into crypto ETFs, as the U.S. positions itself as a regulatory innovator in the digital asset space Staking Gets Tax Clarity: New US Rules Let ETFs Share Rewards With Investors.

The timing of the guidance is significant, coinciding with efforts to end the 40-day government shutdown that furloughed staff at the IRS and SEC IRS Guidance May Enable Staking in Crypto Exchange-Traded Products. While the Senate had yet to vote on a funding resolution at the time of publication, the Treasury's proactive release underscores the administration's commitment to advancing crypto policy despite fiscal challenges. Market observers suggest the move could influence global regulators grappling with similar staking dilemmas, further cementing the U.S.'s leadership in blockchain innovation IRS Guidance May Enable Staking in Crypto Exchange-Traded Products.