Posted 2 years ago | by Ben Armstrong
Coinbase Custody and Bison Trails Join the Proof of Stake Alliance (POSA)
According to a recent press release, Coinbase Custody and Bison Trails have joined the ranks of the Proof of Stake Alliance (POSA). Together with POSA, they will advocate for the adoption of clear regulations on staking proceeds and other initiatives as well.
Founded in 2019, the Proof of Stake Alliance is an advocacy group with more than 18 members. It organizes events and educational initiatives and engages in regulatory and congressional discussions to promote staking-friendly regulation.
Matt Perona, COO at Polychain Capital and POSA board member, said to Cointelegraph that the organization's primary goal is to change the taxation regime for staking rewards:
“First, POSA is working to address how staking rewards received by token holders are taxed. POSA is currently trying to differentiate tax treatment from bitcoin mining guidance so that staking rewards are taxed on the disposition of the asset (the sale of the reward) as opposed to the receipt.”
Better Regulations are Needed
In the U.S, mining and staking rewards are being taxed as direct income, which is a higher rate than capital gains tax normally reserved for traditional assets.
Coinbase Custody and Bison Trails will be helping the alliance to amend this regulation since both organizations are deeply invested in the staking ecosystem by providing customers the means to stake their assets.
Abraham Sutherland, a professor at the University of Virginia School of Law, left a draft to argue that the existing treatment is unfair.
Time for Smart Crypto Laws
The alliance is also engaging with regulators such as the SEC and FinCEN to work on issues related to securities and money services regulation besides its work on tax regulation.
Both Coinbase Custody and Bison Trails will assist POSA with initiatives, and do what they can to push a sane crypto regulatory framework forward in the USA.
“(They will conduct) meetings on the hill with congressional representatives educating them on Proof of Stake based technologies and their potential use cases. Meetings with regulators (SEC, IRS, Treasury, FinCEN) educating them on the intricacies of the technology and building a regulatory framework that allows for the growth and adoption of staking based technologies. Taking part in working groups and helping implement best practices industry standards...Currently, POSA is focused specifically on engaging with regulators and policymakers and trying to build a regulatory framework that is conducive to the growth of the staking industry. Our individual members might be having those types of conversations [with institutions] but POSA is not focused on that nor is it a function of POSA.”
While it is positive to see industry pushing for better regulations in the USA, it would be good if the US government recognized the need to create better crypto regulations, and ensure that the US stays competitive in the crypto and blockchain space.