Signal — What the Treasury Just Did
The U.S. Treasury and IRS have formally permitted crypto exchange-traded products to stake digital assets such as Ethereum, Solana, and Cardano, and to distribute those staking rewards to retail investors. Treasury Secretary Scott Bessent described the policy on X as providing a “clear path” for issuers to include staking within regulated fund structures. For the first time, retail investors in America can earn on-chain yield through traditional brokerage accounts — no DeFi setup, no wallets, no validators.
What is staking?
Staking is like putting your crypto into a high-tech savings account that helps run a blockchain. Instead of earning interest from a bank, you earn rewards from the network itself. When you stake coins like Ethereum or Solana, you’re locking them up so the blockchain can use them to validate transactions and stay secure. In return, you get paid in more crypto — usually a percentage of what you staked. It’s passive income, but powered by decentralized technology
The new U.S. rules now let retail investors earn these staking rewards through regulated investment products called ETPs (Exchange-Traded Products). That means you can buy a crypto fund — like you would a stock — and still earn staking rewards without managing wallets or validators. It’s easier and safer, but you give up control. You won’t get to vote on blockchain decisions or choose how your crypto is staked. Why giving up control is even an issue? That’s the difference between savings and crypto.
The Differentiation — Savings v Crypto
In a savings account, your money is held by a regulated bank, protected by deposit insurance, and overseen by central banks and financial regulators. These institutions act as guardrails, ensuring transparency, solvency, and consumer protection. You earn interest, but you also have legal recourse and systemic safeguards.
In crypto staking, especially outside regulated ETPs, your assets are locked into a blockchain protocol or delegated to a validator — often through platforms that may or may not be regulated, depending on the jurisdiction. There’s no universal insurance, no guaranteed recovery if validators misbehave (slashing), and no central authority ensuring fairness. Your control depends on how and where you stake: direct staking gives you more control but also more risk; platform staking offers convenience but often strips away governance rights and transparency.
The Regulatory Frame — Why This Shift Matters
Before this rule, ETPs could only hold spot assets passively; now they can activate those holdings for yield. This will attract institutional issuers — BlackRock, Fidelity, Ark — to launch staking-enabled products, giving Wall Street sanctioned exposure to proof-of-stake returns. It also provides clarity for tax reporting: rewards will be treated as income, not capital gains. Yet the clarity is double-edged. The state has effectively translated staking — a decentralized economic function — into a regulated yield instrument. The move brings safety but amputates state’s sovereignty and passes it on to decentralized finance.
The Retail Equation — The Math Behind the Shift
Before this guidance, a $10,000 position in a crypto ETP earned nothing. Now that same position may yield around five percent annually, paid as periodic distributions. After management fees, the net yield might settle near four percent. Those rewards are taxable each year, unlike capital gains which apply only upon sale. The investor gains income but forfeits agency: no control over validator selection, no insight into slashing events, no vote in protocol governance. In plain terms, retail investors now receive dividends from networks they do not direct — the equivalent of earning interest on a machine whose code they cannot inspect.
What the Rule Enables and What It Erases
The rule stops short of codifying any retail control. Validator choice remains hidden; governance rights are unaddressed; transparency into staking mechanics is limited. The system gains inflows, but citizens lose agency.
Closing Frame
The Treasury’s staking reform is both an inclusion and an inversion. It invites retail into yield but locks them out of governance. It’s a dividend without a voice. The United States has taken a step toward regulated digital yield, but not toward digital citizenship.