🔍 IRS Clears Path for Crypto ETFs to Earn Staking Rewards Under New Guidance
In a major regulatory breakthrough, the U.S. Internal Revenue Service (IRS) has officially updated its tax guidance to allow crypto exchange-traded products to participate in staking — enabling them to pass those rewards on to their investors.
Treasury Secretary Scott Bessent announced the development on X (formerly Twitter), saying the new rules provide a clear and compliant framework for staking within regulated investment vehicles.
This marks a crucial milestone for mainstream crypto adoption, particularly for institutional investors who have long faced legal uncertainty around staking yields.
✅ What the IRS Now Allows for Staking
According to the newly published guidance, crypto trusts and ETFs can stake assets if they meet key requirements, including:
- Listed on a national securities exchange
- Hold only cash and one type of digital asset
- Assets must be securely held by a qualified custodian
- Strong protections in place to limit investor risk
These conditions are designed to guard against volatility and counterparty failures while enabling broader access to yield-generating digital assets.
Also Read : European Central Bank Push for Digital Euro in 2029, Despite Opposition
📈 Industry Experts: A “Game-Changing” Move for Staking ETFs
Crypto legal expert Bill Hughes from Consensys says the guidance eliminates a major barrier for regulated staking funds:
“This safe harbor provides long-awaited clarity for institutional vehicles… It effectively removes a major legal barrier that had discouraged fund sponsors and asset managers from integrating staking yield into regulated products.”
Financial analysts expect more ETF issuers — especially those linked to Ethereum and other proof-of-stake assets — to quickly pivot into staking strategies.
🏛️ Policy Arrives as Washington Scrambles to Reopen
The timing of this update is notable.
The U.S. government has been partially shut down since October 1, leaving the IRS and the Securities and Exchange Commission (SEC) operating with reduced staffing.
But momentum to end the shutdown gained support over the weekend as bipartisan lawmakers pushed to pass a temporary funding bill.
Even amid government gridlock, regulators are signaling strong support for crypto-market modernization — especially around investment products gaining rapid popularity on Wall Street.
✅ The Bottom Line
With the IRS now greenlighting staking rewards for crypto ETFs:
- Institutional demand is expected to surge
- Retail investors gain easier access to yield-earning digital assets
- U.S. regulatory clarity takes a major leap forward
This development could transform the landscape of crypto-linked investment products, making staking a mainstream financial feature by 2025.
