The recent U.S. Securities and Exchange Commission (SEC) ruling that crypto staking is not a security is being heralded by many as a huge decentralization win. This ruling, if it stands, can trigger a massive expansion of the crypto business. This decision has made a particularly stark contrast with Europe’s MiCA regulation. Some view MiCA as a hurdle to crypto innovation. The SEC’s uncertain decision will almost certainly trigger an exodus of U.S. stakers. This has the potential to turbocharge the growth of proof-of-stake (PoS) networks and further position the U.S. as a global crypto-friendly hub, in-line with the UAE. This clarity comes after years of regulatory ambiguity that hampered innovation across the crypto industry.
A Turning Point for Proof-of-Stake Networks
The SEC’s decision is a huge win for PoS networks like Ethereum, Solana, Cosmos and Avalanche (AVAX). These networks require staking. Participants stake their crypto, putting up assets as collateral to help validate transactions and secure the network, earning rewards in the process. Ethereum, a nascent aspiration back in 2016’s ICO rollout, moved to a PoS consensus mechanism in 2022. Today, it boasts more than 32 million ETH staked (nearly $100 billion).
The returns provided by staking are usually between 5-15% which is comparatively higher return than most bonds. On a global scale, roughly $200 billion in assets are currently staked, earning between $10 and $20 billion in rewards each year according to estimates. The SEC’s ruling should only further incentivize U.S. participation in staking, helping propel growth and innovation within these networks.
U.S. Market Primed for Crypto Growth
The SEC’s ruling shines a bright light on the benefits of PoS networks. It goes a long way toward making the U.S. a more attractive market for crypto innovation. And today, the U.S. market is more receptive than ever to innovators in interoperability and scalability. With transparent frameworks and tax incentives, both the U.S. and UAE are luring in crypto companies. Dubai, for example, boasts more than 50 licensed crypto companies and a market expected to hit $4.5 billion by 2026.
"Staking is about participation, not passive investment" - Anndy Lian
Contrasting Approaches: U.S. vs. Europe
The U.S. is the leader in crypto innovation and we want to keep it that way. Others see Europe’s MiCA regulation as a wet blanket that will kill innovation. In 2021, only 12% of Ethereum's staking nodes were U.S.-based, compared to Europe's 45%. The SEC’s decision sends a signal of a seismic shift that may very well boost the new industry. Bitcoin and Ethereum ETFs are racking up north of $50 billion in volume each day. This crypto boom is positioning the U.S. to continue being a crypto superpower.
Nguyen Thi Hanh
Cryptocurrency Writer
Nguyen Thi Hanh channels progressive, pragmatic views into high-energy, approachable crypto journalism, delivering confident, animated articles with regional and global relevance. Her optimistic, party-going spirit helps translate complex blockchain ideas into viral, visually engaging stories. Outside of writing, she enjoys urban food adventures and organizing community hackathons.
