Significant changes have been made to the tax and regulatory treatment of staking in the United States, impacting both crypto markets and traditional finance.
summary
- A new regulatory path could allow crypto ETFs to stake assets like ETH and SOL without raising trust-level tax issues.
- Staking rewards are passed directly to investors, allowing them to access yield through ETFs.
- Guidance could accelerate adoption, network security, and the launch of staking-enabled funds.
The U.S. Treasury Department and Internal Revenue Service have released new guidance that allows products traded on virtual currency exchanges to participate in staking while maintaining their tax status.
The update, published as Revenue Procedure 2025-31 on November 10, removes a significant barrier that prevented regulated investment products from earning on-chain from proof-of-stake networks such as Ethereum and Solana.
The guidance provides a “safe harbor” framework, clarifying how staking rewards should be treated for tax purposes and how issuers can distribute those rewards to investors without triggering entity-level tax complexities.
What the guidance allows
Under the new rules, physical exchange-traded funds and similar trusts listed on national exchanges can stake their holdings through qualified custodians and pass staking rewards to shareholders. Staking activity must be disclosed to investors, and products must still hold only cash and a single digital asset to qualify.
Staking rewards are taxed as ordinary income, rather than being taxed at the trust level, when the investor receives control of the rewards. This structure preserves the current taxation model used in commodity-style crypto ETFs and avoids conversion to a mutual fund-like structure.
The guidance also requires issuers to publish transparent reporting on the distribution of staking revenue and disclose operational risks such as validator performance penalties and “slashes.”
Analysts estimate that under this model, an Ethereum ETF could have an annual yield of 3% to 5%, while a Solana-based product could yield closer to 5% to 7%, depending on network conditions and participation rates.
Impact on investors and markets
With this update, retail investors may soon be able to access staking yield through standard ETF brokerage accounts without the need to maintain self-custody, set up validators, or interact directly with on-chain protocols.
This change could make financial institutions more competitive, as U.S.-listed crypto products currently lag behind structured products in Europe and Asia, which already allow staking features.
Industry observers expect ETF issuers such as BlackRock and Fidelity to begin amending their Ethereum ETF prospectuses to include staking, while Solana and other network-focused companies are also working on similar filings. Market players also expect international ramifications, including possible collaboration under the EU’s MiCA framework.