The Internal Revenue Service (IRS) has issued new regulatory guidance that permits Wall Street crypto products to stake digital assets and share staking yields with investors, while avoiding tax complications. This development is anticipated to significantly accelerate the mainstream adoption of proof-of-stake blockchains.
Wall Street Crypto Products Can Now Generate Staking Yields for Investors
Investors in crypto exchange-traded products (ETPs) received encouraging news from the IRS and the Treasury Department this week with the release of new regulatory guidance.
On Monday, the IRS published guidance that, under specific conditions, allows crypto products traded on Wall Street to generate staking yields for their investors with regulatory assurance. This framework provides protection for investment trusts, enabling them to stake digital assets and distribute staking yields to retail investors without risking violations of existing regulations or jeopardizing their tax status.
According to the IRS document, under certain conditions, trusts may "stake their digital assets without jeopardizing their tax status as investment trust and grantor trusts for Federal income tax purposes."
Where investment trusts meet the outlined criteria, staking appears to be safely permitted and recognized as an acceptable institutional activity under federal law.
Maintaining US Leadership in Digital Assets and Blockchain Technology
To qualify for protection under the new guidance, an investment trust must meet specific criteria detailed in the IRS document.
These criteria stipulate that trusts can hold only one type of digital asset from a permissionless, proof-of-stake blockchain. The trust's sole functions must be holding, staking, and redeeming the relevant token and its associated yields. Additional requirements include reliance on a custodian and an independent staking provider to manage the staking process.
The guidance took immediate effect upon its publication.
Blockchains utilizing proof-of-stake consensus mechanisms, such as Solana (SOL) and Ethereum (ETH), require network participants to "stake" some of their cryptocurrencies to secure the network and earn rewards in return. These rewards vary in annual percentage yield (APY) based on the network and the quantity of tokens staked.
Positive Reception to the New Policy
US Treasury Secretary Scott Bessent lauded the policy, describing it as a "clear path" for Wall Street to stake digital assets and share staking yields with institutional investors.
Today @USTreasury and the @IRSnews issued new guidance giving crypto exchange-traded products (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.
— Treasury Secretary Scott Bessent (@SecScottBessent) November 10, 2025
Bessent emphasized the policy's importance: "This move increases investor benefits, boosts innovation, and keeps America the global leader in digital asset and blockchain technology."
Industry leaders also expressed their approval of the decision. Bill Hughes, Senior Counsel and Director of Global Regulatory Matters at Consensys, a leading Ethereum software company, commented on X:
The impact on staking adoption should be significant. 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. It effectively removes a major legal barrier that had discouraged fund sponsors, custodians, and asset managers from integrating staking yield into regulated investment products.
Hughes added that, as a consequence of this policy, more regulated entities will now be able to stake on behalf of their investors, which is likely to increase staking participation, liquidity, and overall network decentralization.