Coinbase Custody and Bison Trails Unite with POSA to Advocate for Staking Regulations

Coinbase Custody and Bison Trails Join Forces

In a significant move for the cryptocurrency landscape, Coinbase Custody and Bison Trails have officially joined the Proof of Stake Alliance (POSA), as revealed in a press release dated January 30. Their mission? To champion the cause for clearer regulations surrounding staking proceeds in the crypto world.

The Role of POSA and Its Mission

Founded in 2019, POSA consists of over 18 members united in their efforts to promote fair and informed regulations for staking technologies. The alliance engages in discussions on Capitol Hill while organizing educational events aimed at fostering an understanding of staking processes.

Tax Changes on the Horizon?

The elephant in the room, according to Matt Perona, COO at Polychain Capital and board member of POSA, is the taxation of staking rewards. Currently, stakeholders are taxed on their staking gains much like income, which is notably higher than capital gains tax. Perona elaborates on POSA’s push to change this by encouraging a model where taxation is based on the selling of the rewards rather than at the moment they are received.

The Heavyweights Step In

With Coinbase Custody and Bison Trails in the mix, POSA is beefing up its advocacy efforts. Both companies play a pivotal role in facilitating staking for their clients, making them valuable allies in the fight for regulation reform. As stated by Perona, they will conduct vital meetings with congressional representatives to educate them about the potential and mechanics of Proof of Stake technologies.

Engagement with Regulators

In addition to addressing tax implications, the alliance intends to engage in further discussions with regulatory bodies such as the SEC, FinCEN, and others to establish a solid regulatory foundation. The complexity of how staking operates needs to be distilled into policies that can help this burgeoning industry flourish.

Focus on Regulatory Conversations

One noteworthy observation from Perona is that POSA primarily focuses on regulators and policymakers rather than engaging with institutional players in the space. While individual members might explore collaborations beyond regulatory circles, POSA is not venturing into those waters just yet.

The alliance’s continual efforts signify a proactive approach to navigating the cryptocurrency regulatory landscape, ensuring that staking—and the broader crypto ecosystem—grows in a more manageable and favorable climate.