The Internal Revenue Service issued guidance to create a safe harbor for exchange-traded products to stake digital assets, which cryptocurrency advocates say transforms tax treatment for traditional finance.
Treasury Secretary Scott Bessent posted the news on Monday on X and said the guidance gives ETPs “a clear path to stake digital assets and share staking rewards with their retail investors.”
“This move increases investor benefits, boosts innovation, and keeps America the global leader in digital asset and blockchain technology,” Bessent said.
This comes after the SEC said earlier this year that proof-of-stake activities do not constitute securities transactions.
The IRS said it received questions on whether staking averts a trust from “qualifying for Federal income tax purposes.” The 18-page guidance includes language around a safe harbor with some requirements.
Those requirements say that trust can stake crypto on permissionless proof-of-stake networks if they hold just one digital asset type and cash, use a qualified custodian, among other parameters, said Bill Hughes, senior counsel at Consensys, in a post on X.
“The impact on staking adoption should be significant,” Hughes said. “This safe harbor provides long-awaited regulatory and tax clarity for institutional vehicles such as crypto ETFs and trusts, enabling them to participate in staking while remaining compliant.”
“In short, Revenue Procedure 2025-31 transforms staking from a compliance risk into a tax-recognized, institutionally viable activity, accelerating mainstream adoption across proof-of-stake blockchains,” Hughes added.
© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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