The SEC Must Reconsider Staking in Exchange-Traded Products to Maintain US Competitiveness

The US has lagged behind in staking policy, but recent developments, including a bipartisan letter from lawmakers, are pushing for change. The letter challenges the SEC's directive to exclude protocol staking in ETPs, arguing it undermines investor protections and US market competitiveness. Staking is not an investment product, but a technical requirement for securing proof-of-stake networks like Ethereum. By excluding staking, the SEC is putting American investors at a disadvantage, as other countries have embraced staking in their digital asset ETPs. The impact of these regulations extends beyond Ethereum, affecting possible future ETPs of other proof-of-stake networks. The SEC's cautious stance on staking may be disproportionate to the actual risks involved, and it is time for the agency to reconsider its position and permit staking in ETPs to protect investors and maintain US leadership in global financial markets.