U.S. Treasury sets new guidance for crypto ETF staking

A key change in U.S. tax and regulatory treatment for staking has arrived with implications for both crypto markets and traditional finance.

The U.S. Treasury Department and the Internal Revenue Service have released new guidance that allows cryptocurrency exchange-traded products to participate in staking while maintaining their tax status. 

The update, published on Nov. 10 as Revenue Procedure 2025-31, removes a key barrier that had prevented regulated investment products from earning on-chain yield from proof-of-stake networks such as Ethereum and Solana.

The guidance provides a “safe harbor” framework, clarifying how staking rewards should be handled for tax purposes, and how issuers can distribute those rewards to investors without triggering entity-level tax complications.

What the guidance allows

Under the new rules, spot exchange-traded funds and similar trusts listed on national exchanges may stake their holdings through qualified custodians and pass staking rewards to shareholders. The staking activity must be disclosed to investors, and products must continue to hold only cash and a single digital asset to qualify.

Staking rewards will be taxed as ordinary income to investors when they receive control of the rewards, rather than being taxed at the trust level. This structure preserves the current tax model used by commodity-style crypto ETFs and avoids converting them into mutual fund-like structures.

The guidance also mandates that issuers publish transparent reporting on the distribution of staking income and disclose operational risks like validator performance penalties, or “slashing.”

Analysts estimate that under this model, Ethereum ETFs could yield between 3 and 5% annually, while Solana-based products might yield closer to 5 to 7%, depending on network conditions and participation rates.

Impact on investors and the market

The update could soon allow retail investors to access staking yield through standard ETF broking accounts without requiring them to maintain self-custody, set up a validator, or interact directly with on-chain protocols.

Because U.S.-listed cryptocurrency products currently lag behind structured products in Europe and Asia that already permit staking functions, the change may increase their competitiveness for institutions.

Industry participants expect ETF issuers such as BlackRock and Fidelity to begin amending their Ethereum ETF prospectuses to include staking, while firms focused on Solana and other networks are working on similar filings. Market observers also anticipate ripple effects internationally, including possible alignment under the EU’s MiCA framework.