Institutions may now have a clearer footing to build products around liquid staking tokens and unlock new market segments, according to industry executives.
The crypto industry is hailing the US Securities and Exchange Commission’s latest guidance on liquid staking as a rare regulatory win, with stakeholders calling it a major step forward for decentralized finance and institutional adoption of digital assets.
Released Tuesday, the SEC staff issued a guidance on liquid staking, writing that under certain conditions, liquid staking activities and the receipt tokens they generate do not constitute securities offerings.
“Institutions can now confidently integrate LSTs into their products which is sure to drive new revenue streams, expand customer bases, and enable the creation of secondary markets for staked assets,” Mara Schmiedt, CEO of blockchain developer company Alluvial told Cointelegraph.
This decision sets the stage for a wave of new products and services that will accelerate mainstream participation in digital asset markets.”
Crypto companies have been seeking regulatory guidance from the SEC on liquid tokens. On Thursday, a group of Solana stakeholders wrote a letter to the SEC pushing for their inclusion in exchange-traded funds.
Liquid staking is the process of depositing crypto assets into a third-party provider and receiving staking receipt tokens in return. These receipt tokens can be traded or used in DeFi without waiting for unstaking funds.
“Today’s guidance on liquid staking shows the same nuanced understanding of LST technology that the Crypto Task Force exhibited when we met with them on this topic back in February,” Jito Labs CEO Lucas Bruder told Cointelegraph.
