A major regulatory breakthrough has arrived for the crypto industry — one that could reshape how investors earn yield from digital assets like Ethereum (ETH) and Solana (SOL).
The U.S. Treasury Department and the Internal Revenue Service (IRS) have issued new guidance that officially allows cryptocurrency exchange-traded funds (ETFs) to participate in staking — all while maintaining their existing tax status.
This change, detailed in Revenue Procedure 2025-31, removes a long-standing tax barrier that had stopped regulated crypto investment products from earning staking rewards directly on-chain.
What’s Changing
Under the new framework, spot crypto ETFs and similar trusts listed on U.S. exchanges can now stake their digital assets through qualified custodians. The rewards from this staking activity can be passed directly to investors instead of being taxed at the fund level.
That means investors can finally access staking yields from ETH, SOL, and other proof-of-stake tokens through traditional brokerage accounts — no validator setup or wallet management required.
Importantly, the IRS has clarified that staking rewards will be taxed as ordinary income when investors actually receive them. This avoids treating ETFs like mutual funds and keeps them under the commodity-style tax model that current crypto funds use.
The guidance also requires issuers to disclose their staking practices, report staking income transparently, and warn investors about risks such as slashing or validator penalties.
What It Means for the Market
Analysts estimate potential annual yields of 3–5% for Ethereum ETFs and 5–7% for Solana-based funds, depending on network conditions and participation rates.
This move could make U.S. crypto ETFs more competitive globally. Until now, funds in Europe and Asia have already allowed staking features, giving them an advantage in yield generation.
Industry watchers expect that major asset managers — including BlackRock, Fidelity, and VanEck — will quickly move to update their Ethereum ETF filings to include staking functions. Solana-focused funds are expected to follow.
The update could also have ripple effects internationally, possibly encouraging other jurisdictions to align with the U.S. approach, especially under frameworks like the EU’s MiCA regulation.
Why It Matters
This is more than just a tax tweak — it’s a major bridge between traditional finance and decentralized networks.
By allowing staking within ETFs, regulators are opening the door for mainstream investors to participate in on-chain economics without leaving familiar financial infrastructure.
In the long run, this could:
- Boost network security by increasing validator participation,
- Drive capital inflows into proof-of-stake ecosystems, and
- Accelerate the launch of staking-enabled ETFs that merge traditional finance with blockchain yield.
In short — this ruling turns staking from a niche crypto activity into a mainstream investment feature, making the U.S. market far more dynamic and globally competitive.
