U.S. tax authorities have removed a major roadblock for crypto ETPs or exchange-traded products to earn yield on behalf of investors. On Nov. 10, 2025, the Treasury and IRS issued a revenue procedure that creates a narrow safe harbor allowing certain trust-style ETPs to stake underlying digital assets. As an added benefit, these companies will not lose their tax treatment as investment or grantor trusts.
Criteria to qualify
The safe harbor rules outline the conditions managers must meet to reap the benefits. Firstly, the product must hold only cash and a single permissionless proof-of-stake token. It needs to be listed on a national securities exchange with SEC-approved disclosures in place.
Digital asset custody must be by a qualified custodian, and staking rewards must be distributed in-kind or sold for cash at least quarterly. They will also have to put in place protections against “slashing”. The authorities have also given a leeway for existing trusts to amend their governing documents within a nine-month window starting from November 10, in order to get the benefits.
Practically, this means U.S. issuers who paused staking plans, notably those tied to Ethereum and Solana products, now have a clear tax path to activate staking. All they need to do is restructure their products to meet the revenue procedure’s rules and SEC disclosure expectations. Industry coverage indicates issuers such as BlackRock and Fidelity had delayed staking pending clarification. The new guidance clears the way for them to revisit those plans.
Tapping the U.S. market
Staking ETPs are already common in Europe. Providers including 21Shares, CoinShares, VanEck and Bitwise operate Ether and Solana staking or ‘staked’ ETPs that use institutional staking providers and custodians to generate yield for holders. Now, this playbook can be used by U.S. issuers who can copy their methods.
The ruling narrows the gap between owning tokens directly and owning regulated ETPs, potentially bringing yield-bearing crypto exposure to mainstream investors. It will also lower the friction for fund launches and will ensure clearer tax reporting by the issuers.
Moreover, rewards will be reported as income when distributed, and this will raise operational scrutiny around custody, liquidity, and counterparty risk. The move is sure to expedite product rollouts and will see more capital chasing staking yields. With regulatory clarity, staking will become more mainstream with better disclosures and management.
Interestingly, not too long ago, a NY Times investigation revealed that the IRS and treasury department, under the Trump administration, were using procedural tweaks to benefit crypto firms, helping them with tax breaks, costing the Federal government billions of dollars.