The U.S. Department of the Treasury and the Internal Revenue Service have released new tax guidance that gives crypto exchange-traded products a clearer route to stake digital assets. Under the framework, qualifying investment trusts and grantor trusts can participate in proof-of-stake networks without jeopardizing their federal tax classification.
The update is widely seen as a major step for regulated crypto investment vehicles in the United States. Treasury Secretary Scott Bessent said the guidance gives crypto ETPs a defined path to stake digital assets and pass staking rewards on to retail investors. In his view, the move should improve investor benefits, support innovation, and help maintain the country’s leadership in digital assets and blockchain technology.
Safe harbor sets the tax framework
The guidance creates a tax safe harbor for eligible trusts that engage in staking under specific conditions. The IRS said staking in this context is treated as a way to preserve and protect trust property, rather than a speculative profit-seeking activity. That distinction is important because it allows trusts to retain their existing tax status while adding staking-based income to product structures.
At the same time, the IRS made clear that the procedure is limited in scope. It does not resolve other crypto tax issues such as forks, airdrops, or unrelated business taxable income, leaving those topics outside this particular framework.
Liquidity, custody, and disclosure remain central
The new rules come with strict compliance obligations. All staking activity must follow SEC disclosure standards and national securities exchange liquidity requirements. Trusts are required to maintain written liquidity risk procedures and ensure that at least 85% of assets remain readily available for redemptions.
If assets are locked in staking arrangements, issuers must maintain redemption access through liquidity reserves or contingent borrowing facilities. The framework also requires all staking relationships to be conducted at arm’s length through independent and unrelated providers. In addition, digital assets must be held by a qualified custodian that controls the relevant private keys.
Potentially significant for the U.S. crypto ETP market
Under the guidance, a trust may hold only one type of digital asset plus related cash, and staking rewards must be distributed no less frequently than quarterly. The policy also aligns with recent SEC actions, including approvals for in-kind creations and redemptions and broader listing standards for exchange-traded products holding digital assets.
Taken together, the Treasury and IRS guidance gives regulated crypto ETPs a formal path to integrate staking rewards into their structures. While it could expand investor return opportunities, it also makes clear that liquidity management, custody safeguards, and independent service arrangements will remain key pillars of compliance.