In a major regulatory shift, the U.S. Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) released new guidance that paves the way for crypto exchange-traded products (ETPs) and trusts to stake digital assets and share staking rewards with retail investors.
Treasury Secretary Scott Bessent described the development as giving ETPs “a clear path to stake digital assets and share staking rewards with their retail investors.”
The core of the guidance is encompassed in Revenue Procedure 2025-31, which creates a tax-safe-harbor enabling certain investment trusts and ETPs to engage in staking of proof-of-stake (PoS) assets without jeopardising their status as investment or grantor trusts for federal-income tax purposes.
What the Guidance Covers
For ETPs and trusts to take advantage of the new safe harbour, the following conditions must generally be met:
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The vehicle must hold only one type of digital asset plus cash, and that asset must be on a permissionless proof-of-stake network, such as Ethereum or Solana.
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A qualified custodian must hold the assets, and staking services must be outsourced to independent validator or provider arrangements.
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The trust or ETP must maintain redemption and liquidity controls and the staking-reward sharing with investors must follow clear, arm’s-length terms.
As a result, regulated investors will now be able to access yield from staking through ETPs, instead of directly managing validator nodes or self-custody. This could significantly broaden the appeal of staking-enabled crypto products, while remaining within existing tax and regulatory frameworks.
Why It Matters for Crypto Markets
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Institutionalisation of staking: The guidance removes one of the key legal and tax hurdles that have sidelined many institutional funds from incorporating staking yield into their offerings.
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Retail access to crypto yield: Long-tail searches such as “ETPs share staking rewards with retail investors US” and “crypto ETP staking yield guidance Treasury IRS” reflect a growing interest in regulated staking products for everyday investors.
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Competitive dynamics: With U.S. regulators providing clarity, funds may increasingly incorporate staking strategies, potentially reshaping the product set in digital-asset portfolios and prompting global competitiveness.
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Network-effect implications: Easier staking through mainstream products could accelerate capital flow into PoS networks, bolstering liquidity and ecosystem participation for assets like Ethereum and Solana.
Risks & What to Monitor
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Implementation and timing: Although the guidance is now in effect, actual rollout by fund sponsors and custodians may take time. Watch for first-generation staking-enabled ETPs.
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Product complexity: Investors must scrutinise how rewards are structured, fee arrangements, lock-ups, and whether the fund maintains an appropriate liquidity reserve.
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Tax and regulatory clarity: While tax treatment is clarified for trusts, broader regulatory issues such as securities regulation, token classification and cross-border flows remain.
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Market risk: Yield-generating crypto products may attract capital quickly, but staking markets remain subject to protocol risks, slashing events and volatile token dynamics.
FAQs
Q1: What is the new U.S. guidance about?
The Treasury and IRS have issued guidance enabling crypto ETPs and trusts to stake digital assets and distribute staking rewards to retail investors under certain conditions.
Q2: What types of products and networks are eligible?
ETPs or trusts that hold a single PoS-asset (e.g., Ethereum, Solana), maintain a custodial arrangement, and meet liquidity and structure criteria can participate.
Q3: Why are the long-tail keywords important here?
Keywords like “crypto ETP staking guidance Treasury IRS” and “ETPs share staking rewards retail investors US 2025” reflect how investors and product developers are searching for information about regulated access to staking yield.
Q4: Does this mean direct crypto holders are excluded?
No direct holders can continue to stake. But the guidance specifically opens the staking yield channel for regulated vehicles like ETPs, thereby broadening institutional and retail access.
Q5: What should investors watch next?
Key milestones include launch of the first staking-enabled ETPs, disclosures of staking yield structures, and volume/fee transparency from sponsors.
Q6: What risks remain?
Major risks include delays in product launch, regulatory or tax changes, slashing or protocol risks in staking, and investor misunderstanding of staking-reward mechanics.
