Regulatory Shift Authorizes Crypto ETFs and Trusts for Staking
The institutional crypto market has reached a significant milestone. The U.S. Treasury and the IRS now authorize crypto ETFs and trusts to participate in staking and redistribute rewards to their investors. This decision has the potential to significantly disrupt the world of digital asset investment.
In brief
- •The U.S. Internal Revenue Service (IRS) now authorizes crypto ETFs and trusts to engage in staking of digital assets.
- •Exchange-traded products will be able to share staking rewards directly with their retail investors.
- •This regulatory clarification removes a major obstacle that was hindering institutional adoption of staking.
Treasury Secretary Scott Bessent formalized this major development on Monday. Federal agencies now provide “a clear path” for exchange-traded products to stake digital assets.
Practically, crypto ETFs can now generate additional yields through staking and redistribute them to their investors. This is a significant advantage for an institutional market that has been seeking this clarification for months.
The imposed conditions remain strict but coherent. Trusts must be listed on a national securities exchange. They can only hold cash and one type of digital asset, which must be kept with an approved custodian.
Risks for investors must also be clearly mitigated. A rigorous framework aims to protect individuals while unlocking the potential of institutional staking.
Bill Hughes, senior advisor at Consensys, praises this as a “significant” step for staking adoption. He explains, “This secure regulatory framework brings long-awaited clarity.” Fund promoters, custodians, and asset managers can now incorporate staking revenues into their products without fear of sanctions. A major legal obstacle has been removed.
This decision follows the SEC’s approval last September of generic listing standards for crypto ETFs.
The IRS and Treasury have directly taken this change into account to update their recommendations. This inter-agency coordination reflects a political will to regulate rather than hinder financial innovation.
Solana Leads the Way with High-Yield ETFs
The timing of this announcement coincides with a notable phenomenon. Since late October, the Bitwise Solana ETF (BSOL) has experienced a spectacular start. More than $545 million flowed into the ETF in less than two weeks, with $30 million invested in a single day.
This success is attributed to its innovative structure. The ETF offers full staking with an annual yield of 7%, without investors needing to hold the asset directly. This model is transformative for traditional financial institutions, enabling them to generate passive income while adhering to regulatory frameworks.
The contrast with existing products is striking. While the BSOL ETF is attracting capital, Bitcoin ETFs have seen outflows of $2.1 billion and Ethereum ETFs have lost $579 million over the same period. Asset managers are clearly favoring blockchains that offer built-in yield rather than just price exposure. Grayscale has recognized this trend by launching its own Solana ETF (GSOL), which has already accumulated $114 million.
The new IRS guidelines are expected to amplify this trend. Issuers of Bitcoin ETFs and Ethereum will soon be able to offer “staking” versions of their products. The potential is considerable: on Ethereum, where 28% of the total supply is staked, yields currently range between 3% and 4% per year. This represents a substantial income source for funds managing billions of dollars.
The United States is ushering in a new era for institutional crypto investment. By authorizing staking for ETFs, Washington is transforming these products into genuine yield generators. The competition for high-yield crypto ETFs has just begun.