The US Department of the Treasury and the Internal Revenue Service have introduced new guidance allowing cryptocurrency exchange-traded products (ETPs) to stake digital assets and distribute staking rewards directly to retail investors. The landmark move addresses restrictions that had long prevented such products from being offered on-chain yields, marking a major shift in digital asset regulation.
Announced by Treasury Secretary Scott Bessent, the policy provides clarity on how trusts and ETPs can participate in staking without losing their tax-qualified status. It also introduces a safe harbor for institutions that meet specific operational requirements.
“This move increases investor benefits, boosts innovation, and keeps America the global leader in digital asset and blockchain technology,” Bessent said.
The 18-page guidance, titled Revenue Procedure 2025-31, establishes conditions for qualifying trusts. These must trade on a national securities exchange, hold only one digital asset and cash, and be managed by a qualified custodian. They are also required to use an independent staking provider while following liquidity standards designed to protect investors.
The IRS stated that the policy responds to repeated questions about whether staking activities could disqualify trusts from federal tax recognition. The agency clarified that compliant trusts can now stake assets on permissionless proof-of-stake networks.
Bill Hughes, senior counsel at Consensys, said the framework would significantly expand institutional participation. “This safe harbor provides long-awaited regulatory and tax clarity for institutional vehicles such as crypto ETFs and trusts,” he said. “It transforms staking from a compliance risk into a tax-recognized, institutionally viable activity.”
The policy follows the Securities and Exchange Commission’s earlier statement confirming that proof-of-stake activities do not constitute securities transactions. Analysts predict the move will accelerate institutional adoption of proof-of-stake assets like Ethereum, Solana, and Avalanche.
In the past, ETPs in the US were only able to earn returns from holding physical assets like Bitcoin or Ethereum. However, the new framework allows issuers to offer returns through staking based on a dividend-like return structure in traditional finance. This framework is expected to bring in more investors seeking yield opportunities in a regulated space.
This guidance puts the United States in front of other major jurisdictions in terms of incorporating staking into financial regulation. Analysts also believe it will promote competition among ETP issuers, while enhancing transparency in the staking process.
The announcement coincided with growing optimism over a bipartisan Senate bill aimed at ending the US government shutdown. Late Sunday, November 9, lawmakers voted 60–40 in favor of advancing the measure, paving the way for a potential reopening later this week.
Senate Majority Leader John Thune said, “After 40 long days, I’m hopeful we can bring this shutdown to an end.” The deal includes commitments to rehire federal workers and extend health-related tax credits.
With the return of trust, the cryptocurrency market has shown some initial signs of returning to life. Bitcoin has regained its strength, and at the same time, Ethereum, Solana, and Avalanche are recovering from previously sustained losses.
This combined regulatory and fiscal policy raises a vital question: whether US policy openness and economic stability would be the next stage for the five institutional investors to flow into the crypto markets.
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The move taken by the Treasury and the IRS gives crypto ETPs the power to stake assets and distribute the staking rewards among investors. This advancement provides market clarity, backs up the proof-of-stake sectors, and presents the US as a superpower in the world of regulated digital asset innovation.