Key Highlights
- U.S. Treasury and IRS issue new guidance letting crypto ETPs stake digital assets like Ethereum and Solana.
- Funds can now distribute staking rewards to investors while staying fully tax-compliant under Revenue Procedure 2025-31.
- Treasury Secretary Scott Bessent says the move “boosts innovation, increases investor benefits, and keeps America a blockchain leader.”
The U.S. Treasury Department and the Internal Revenue Service (IRS) have formally authorized crypto exchange-traded products (ETPs) and investment trusts to stake proof-of-stake (PoS) digital assets like Ethereum and Solana.
The guidance, issued Monday as Revenue Procedure 2025-31, establishes a long-awaited safe harbor for trusts holding stakable digital assets, allowing them to distribute staking rewards to investors while maintaining their favorable pass-through tax status.
A clear path to staking
Treasury Secretary Scott Bessent announced the move on X, saying it provides “a clear path to stake digital assets and share staking rewards with their retail investors.” He added that the policy “increases investor benefits, boosts innovation, and keeps America the global leader in digital asset and blockchain technology.”
The new Revenue Procedure 2025-31 framework gives regulated funds a way to generate yield from staking — a process where crypto holders lock tokens to help secure a blockchain network and, in return, earn rewards, without breaching tax or securities rules.
What the new rules require
Under the safe harbor, eligible ETPs and trusts must meet strict conditions to qualify:
- Single-asset focus: The fund may hold only one digital asset, plus cash.
- Qualified custodians: The digital assets must be handled by a licensed custodian that securely manages the keys and staking on behalf of the fund.
- Liquidity requirements: Funds must stick to SEC-approved liquidity rules, making sure that at least 85% of their assets can be quickly redeemed, even when part of them is locked up in staking.
- Independent staking providers: Trusts need to work with outside, independent staking providers under fair agreements to keep things transparent and avoid any conflict of interest.
- No discretionary trading: The fund’s job is simple — hold, stake, and redeem the assets. It can’t trade them or try to chase extra profits.
Together, these rules make sure staking stays a passive activity, allowing the fund to keep its clean tax status as an investment or grantor trust.
Industry applauds long-awaited clarity
The decision was met with widespread approval across the crypto and asset management industries.
Bill Hughes, Senior Counsel at Ethereum software company Consensys, called it a “long-awaited regulatory and tax clarity” that removes a major barrier for institutions.
He said the safe harbor enables funds “to participate in staking while remaining compliant” and “effectively removes a major legal barrier that had discouraged fund sponsors, custodians, and asset managers from integrating staking yield into regulated investment products.”
Analysts say the rule could accelerate the rollout of staking-enabled ETFs and trusts, allowing Wall Street investors to earn staking rewards passively through traditional brokerage accounts — a benefit previously limited to crypto-native users.
What staking means for investors
Proof-of-stake blockchains like Ethereum and Solana rely on validators who lock up their tokens to secure the network. In exchange, they earn staking rewards — typically ranging from 1.8% to 7% annually.
Until now, U.S. investment funds couldn’t take part in staking without running the risk of breaking tax or regulatory rules. That meant most crypto ETFs holding proof-of-stake assets, like Ethereum or Solana, had to stay completely passive — simply tracking token prices and missing out on the extra income that staking could generate.
That’s changing now with Revenue Procedure 2025-31. The new rules let funds pass staking rewards on to their investors while still staying completely compliant with federal regulations. In simpler terms, everyday investors can now earn staking yields through regulated ETFs, without having to handle wallets, private keys, or technical staking setups themselves.
From a gray zone to a green light
This shift builds on the SEC’s decision in September to approve generic listing standards for crypto ETFs — a move that opened the door for spot Ethereum and Solana funds. At the time, these ETFs could not stake their holdings due to tax and regulatory uncertainty.
Now, with the IRS and Treasury’s approval, that limitation has been lifted. The agencies explicitly referenced the SEC’s rule changes in their new guidance, signaling inter-agency alignment for the first time on staking-related financial products.
Policy arrives amid Washington shutdown drama
The timing of the announcement raised eyebrows in Washington, coming as lawmakers worked to end a 40-day government shutdown that had furloughed employees across the Treasury, IRS, and SEC. Reports over the weekend indicated that several Democratic senators were ready to join Republicans in passing a continuing resolution to reopen the government through January.
Even with all the political chaos in Washington, the release of Revenue Procedure 2025-31 shows that the administration is still pushing ahead with plans to bring clear rules and structure to the digital asset space — even while much of the government is tied up in budget battles.
Patrick Witt, Executive Director of President Donald Trump’s Council of Advisors for Digital Assets, praised the move, saying it stemmed directly from a recommendation in a White House report on crypto published earlier this year.
A turning point for institutional crypto
A lot of analysts are calling this a real turning point for crypto on Wall Street. Now that big institutions finally have a clear and legit way to stake through ETFs and trusts, it could really blow the doors open for mainstream participation. As more major players jump in, staking will make blockchains stronger, improve market flow, and push proof-of-stake networks like Ethereum and Solana right into the center of the financial world.
“This framework aligns tax treatment with SEC disclosure and exchange liquidity standards, reinforcing staking as a legitimate, conservative yield-generation strategy within U.S. financial products,” Hughes noted. “In short, Revenue Procedure 2025-31 transforms staking from a compliance risk into a tax-recognized, institutionally viable activity.”
How far the U.S. has come
Crypto advocates highlighted the stark contrast between today’s policy and regulatory attitudes just a few years ago.
As ETF Institute Co-Founder Nate Geraci posted on X, “Just two years ago, we had then SEC Chair Gary Gensler indicating that proof of stake tokens were securities… Today, we have the U.S. Treasury Secretary providing tax clarity on staking in ETFs that now hold those very same proof of stake tokens. We’ve come so far.”
With this decision, the U.S. government has essentially made staking a legitimate part of the regulated financial world. It signals a future where blockchain rewards and traditional finance can work hand in hand.
The bottom line
Revenue Procedure 2025-31 marks a major move toward fully integrating crypto into the U.S. financial system. By letting ETFs and trusts stake digital assets, the Treasury and IRS have made it possible for millions of investors to earn staking rewards through regulated and secure investment products.
What used to be viewed as a complicated and risky crypto activity is now officially recognized as a legitimate, tax-compliant investment strategy on Wall Street.
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