Ethereum and Solana ETFs Now Permitted to Stake Under New U.S. Treasury and IRS Guidance: Institutional Validation Accelerates Crypto's Transition to Mainstream Asset Class

The U.S. Treasury and IRS have issued groundbreaking guidance on November 10, 2025, enabling crypto exchange-traded products (ETPs) to stake proof-of-stake (PoS) assets like Ethereum and Solana while distributing staking rewards to investors, according to a Coinotag analysis. This regulatory shift, coupled with the SEC's earlier clarification on staking activities, marks a pivotal moment in institutional validation of cryptocurrencies as a mainstream asset class. By allowing ETPs to generate and distribute staking yields-ranging from 3-5% for Ethereum and 5-7% for Solana-regulators have created a framework that bridges decentralized finance (DeFi) with traditional investment vehicles, as noted in a CryptoNewsZ report.

A New Era for Staking-Enabled ETFs

The Treasury's guidance mandates that ETPs maintain 85% liquidity for redemptions and operate under qualified custodians like Coinbase Custody or BitGo to mitigate risks such as slashing penalties, according to a Coinotag analysis. This structure ensures that investors can access both capital appreciation and passive income from staking rewards, which are now taxable as ordinary income under IRS rules, as reported by Coinotag. For example, Ethereum ETFs can now stake through custodians and distribute rewards quarterly, while Solana ETFs leverage the network's high transaction speeds and low fees to offer competitive yields, as noted in the CryptoNewsZ report.

The regulatory clarity has already spurred institutional adoption. The Bitwise Solana Staking ETF (BSOL), launched in 2025, generated $55.4 million in first-day trading volume-the highest debut for a crypto ETF that year, according to a Coinotag analysis. This success underscores growing trust in Solana's staking model, which was further validated by the SEC's May 2025 guidance stating that certain PoS activities do not constitute securities offerings, as reported by Coinotag.

Institutional Infrastructure and Strategic Partnerships

The institutional validation of crypto is not limited to ETFs. Strategic partnerships between blockchain networks and traditional financial giants are accelerating mainstream adoption. For instance, Western Union, the world's largest money transfer company, has adopted Solana's blockchain to issue its USD Payment Token (USDPT), leveraging the network's capacity for 65,000 transactions per second and sub-$0.01 fees, according to a The Block report. This partnership, valued at over $800 billion in the cross-border remittance market, introduces millions of users to blockchain technology while enhancing Solana's real-world utility, as noted in the The Block report.

Meanwhile, REX Shares and Osprey Funds have filed with the SEC to launch staking ETFs that allocate at least 50% of holdings to Solana and Ethereum, as reported in a Blockonomi analysis. These funds, structured as C corporations for tax purposes, bypass traditional regulatory hurdles by utilizing a streamlined 40-Act filing process, as noted in the Blockonomi analysis. Commissioner Hester Peirce has praised the guidance as "welcome clarity for stakers," though concerns remain about potential misinterpretations of legal frameworks, as reported in the Blockonomi analysis.

Tax Implications and Market Dynamics

The IRS's tax treatment of staking rewards as ordinary income introduces both opportunities and challenges. While investors can now access yield-generating strategies within regulated structures, the tax burden may influence demand for staking-enabled products, as noted by Coinotag. However, legal experts like Greg Xethalis of Multicoin Capital argue that the guidance provides a "safe harbor" for ETPs, enabling tax transparency and fostering innovation. Treasury Secretary Scott Bessent emphasized that the framework enhances investor benefits while promoting compliance, signaling broader institutional confidence in crypto's long-term viability, as reported in the Coinotag analysis.

Conclusion: Mainstream Adoption in Motion

The convergence of regulatory clarity, institutional infrastructure, and strategic partnerships is propelling crypto toward mainstream adoption. Ethereum and Solana ETFs, now permitted to stake under Treasury and IRS guidance, offer a regulated pathway for investors to participate in DeFi yields while aligning with traditional financial systems. As more institutions enter the space-whether through staking ETFs, blockchain partnerships, or cross-border solutions-the crypto market is poised to achieve the liquidity, transparency, and scalability required to become a cornerstone of global finance.