Coinbase CEO Brian Armstrong this week tweeted in reaction to rumors of a planned ban on staking for retail customers, calling it a “terrible path” for the US.
Staking involves crypto users earning passive crypto income by staking their coins in a collective pool on an exchange or in a digital wallet. The average interest rate on the top 10 staked coins is 7.62% according to research site Staking Rewards. But yields can be as high as 40-50% with locked staking on sites like Binance.
A 2023 report by exchange Kraken put the whole value of staked assets at $42bn.
“Staking is a really important innovation in crypto. It allows users to participate directly in running open crypto networks. Staking brings many positive improvements to the space, including scalability, increased security, and reduced carbon footprints,” Armstrong continued.
“Thankfully, we are a country of laws. Even if the SEC would like to get rid of crypto entirely, which may be the case, the law and the courts won’t allow it.”
Jake Chervinsky, Chief Policy Advisor, Blockchain Association
An outright ban on crypto seems unlikely. “Thankfully, we are a country of laws. Even if the SEC would like to get rid of crypto entirely, which may be the case, the law and the courts won’t allow it,” said Jake Chervinsky, Chief Policy Advisor, Blockchain Association.
Alison Mangiero, the executive director of the Proof of Stake Alliance (POSA) told crypto news site CoinDesk that her organization opposes any assertion that staking constitutes an unregistered security.
“Staking tends to get misconstrued with unrelated activities like lending, but staking is fundamentally a way for anyone to join in providing security for proof of stake networks,” she said. “The existence of staking service providers allows everyday Americans to participate in staking, which democratizes network consensus and validation and is core to the continued growth of the global decentralized internet. Any regulatory action that runs counter to this misunderstands the nature of staking, and hinders America’s ongoing efforts to foster domestic technological innovation.”