Charles Hoskinson Reacts to Cardano’s Compliance with New IRS Rules

TLDR

• Charles Hoskinson expressed excitement over Cardano’s alignment with the new IRS and Treasury staking rules.
• The new guidelines emphasize liquidity requirements for crypto ETPs and place restrictions on token lock-ups.
• Cardano’s self-custodied and liquid staking model fits perfectly with the new regulations, offering a competitive edge.
• The IRS guidelines require assets to be transferable within one business day to meet redemption standards.
• Cardano’s staking system allows users to delegate ADA without locking tokens, positioning it well for regulated ETPs.

Charles Hoskinson expressed enthusiasm over Cardano‘s alignment with the new IRS and Treasury staking rules. The guidelines, released on November 10, outline requirements for staking and staking rewards in crypto ETPs. This development could have major implications for Cardano’s standing in the U.S. regulatory landscape.

Cardano’s Liquidity Staking Model Advantage

The U.S. Treasury and IRS’ updated guidance emphasizes liquidity requirements for crypto-based ETPs. Under these rules, assets must be transferable within one business day to meet redemption standards. Cardano’s self-custodied and liquid staking model is well-suited to these conditions.

Cardano’s staking system allows users to delegate ADA without locking tokens. This feature sets it apart from other PoS networks where staking involves token lock-ups. Army of Spies, a Cardano stake pool operator, noted that this liquidity feature positions Cardano favorably.

Hoskinson shared his optimism on X, posting a GIF of a smiling man. He signaled his confidence that Cardano’s staking model will thrive under the new regulations. The liquid staking setup makes Cardano a natural contender for future crypto ETPs under the updated guidelines.

Grayscale Seeks Approval for Cardano ETP

The IRS guidance has presented challenges for many other PoS networks with token lock-up requirements. These networks could struggle to meet the liquidity standards needed for ETP eligibility. Cardano, however, remains well-positioned due to its unique staking mechanism.

Hoskinson’s reaction underscores the importance of Cardano’s compatibility with the IRS and Treasury rules. The network’s design provides flexibility for investors, which is highly advantageous under the new framework. As a result, Cardano could gain a competitive edge as the crypto ETP market evolves.

Currently, Cardano does not have a regulated spot ETP in the United States. Grayscale Investments is the only firm attempting to launch a spot Cardano ETF. Despite multiple delays, the SEC’s review process is expected to resume now that the government shutdown is over.

Optimism is building around the SEC’s potential approval of Grayscale’s Cardano ETF. The firm’s efforts could lead to the first regulated spot Cardano ETP, offering new opportunities for investors. This could mark a turning point for Cardano’s institutional adoption.

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