IRS Clarifies Crypto Staking Rewards for ETFs and Trusts
The U.S. IRS released new safe-harbor tax guidance clarifying crypto staking within regulated ETFs and trusts. Under the 18-page directive, eligible funds listed on national exchanges can earn and distribute staking rewards if they hold only one digital asset type plus cash, use a qualified custodian, implement robust risk controls, follow an SEC-approved redemption liquidity mechanism, and maintain separation from independent staking providers.
Treasury Secretary Scott Bessent said the framework offers clear legal and tax structure for funds to participate in crypto staking, boosting investor benefits, spurring innovation, and reinforcing U.S. leadership in digital assets. Industry experts such as Bill Hughes of Consensys call the update a regulatory milestone, predicting it will drive wider decentralized staking participation, increase liquidity, and integrate staking rewards into mainstream crypto investment products.
Bullish
By providing safe-harbor tax guidance for crypto staking within regulated ETFs and trusts, the IRS removes a key legal barrier, reducing regulatory uncertainty and potentially unlocking significant institutional and retail capital flows into staking products. In the short term, clearer crypto staking tax rules may spur buying as funds prepare to integrate staking rewards. Over the long term, the development supports sustained growth and liquidity in staking markets, increasing network security and decentralization, which is typically positive for asset valuations and market confidence.