Scott Bessent Says Treasury, IRS Guidance 'Keeps America The Global Leader' In Crypto
News Summary
The U.S. Treasury and IRS have issued new guidance, providing a clear path for crypto Exchange Traded Products (ETPs) to stake digital assets and distribute rewards to investors, effectively removing a significant regulatory barrier. The IRS introduced a safe harbor framework allowing trusts to stake digital assets without losing their tax status as investment or grantor trusts. Under this new policy, crypto ETPs tracking proof-of-stake (PoS) assets like Ethereum (ETH), Cardano (ADA), or Solana (SOL) can now directly stake these assets and distribute the resulting rewards to investors within a clear, tax-compliant framework. Treasury Secretary Scott Bessent stated that this move "gives crypto ETPs a clear path to stake and share rewards" and "boosts innovation and keeps America the global leader in digital asset and blockchain technology." Industry leaders have hailed it as a "major legal breakthrough" for the sector, believing it removes the largest tax uncertainty and could accelerate new product development.
Background
Digital asset staking is a crucial mechanism in Proof-of-Stake (PoS) blockchain networks, where users lock up their cryptocurrencies to support network operations and validate transactions, earning rewards in return. However, regulatory and tax treatment of crypto staking in the U.S. has long been uncertain, deterring institutional investors and regulated financial products from participating. Previous regulatory efforts include the IRS's Revenue Ruling 2023-14, which outlined how staking rewards are taxed. Furthermore, in August 2025 (three months prior to this news), the U.S. Securities and Exchange Commission (SEC) clarified that protocol-level staking and "staking receipt tokens" fall outside its jurisdiction if not linked to an investment contract. These preceding steps laid the groundwork for the joint Treasury and IRS guidance, which aims to provide a clear legal and tax framework for staking activities within regulated products.
In-Depth AI Insights
What does this guidance signify for the broader digital asset strategy of the Trump administration? - This guidance strongly aligns with the Trump administration's stated goal of "keeping America the global leader" in digital assets. It's less a mere technical fix and more a strategic maneuver to attract digital asset innovation and capital by providing regulatory certainty. In a competitive landscape with the EU and Asian hubs (notably Hong Kong and Singapore) vying for crypto leadership, the U.S. is positioning itself as a more attractive jurisdiction for Web3 companies and investors. Treasury Secretary Bessent's explicit mention of "global leader" hints at geoeconomic competition. Why is Treasury and IRS issuing this guidance now, rather than the SEC? - This reflects a pragmatic division of labor within the Trump administration's approach to crypto regulation. The SEC, under Chair Gary Gensler, has long pursued a "regulation by enforcement" strategy, focusing on classifying most crypto assets as securities. However, the intervention by Treasury and IRS suggests that the executive branch may recognize the SEC's approach has failed to provide necessary market clarity. By leveraging their tax and financial stability mandates, Treasury and IRS can bypass the SEC's deadlock on securities classification, directly creating operational space for regulated entities. This allows for market vitality while avoiding potentially lengthy and contentious legislative processes. It could signal a future trend of more coordinated, executive-branch-led crypto policy development. How might this shift impact the competitive landscape between traditional financial institutions and crypto-native firms? - For traditional financial institutions, this is a significant boon. The clear regulatory path reduces compliance risk, encouraging more established financial giants to launch staking-driven ETPs and other products, thereby entering the crypto yield market. This will accelerate the convergence of TradFi and crypto, potentially attracting a broader range of mainstream institutional capital through more familiar and regulated investment vehicles. For crypto-native firms, while regulatory clarity is beneficial overall, they will now face intensified competition from well-capitalized, compliance-experienced traditional players. The focus of competition will shift from purely technical innovation to product packaging, compliance infrastructure, and distribution networks, which may favor firms that can adapt quickly and partner with TradFi entities, but potentially squeeze smaller, purely crypto-focused companies.