Coinbase Custody and Bison Trails have joined the Proof of Stake Alliance (POSA), a lobbying organization hoping to push regulators to clarify the legal treatment of staking services.
Announced Thursday, the lobbying group said having the two companies on board adds weight to its mission of advancing the proof-of-stake (POS) industry. Other members of the group include Tezos, the Interchain Foundation and the Web3 Foundation.
Proof-of-stake networks have participants, or validators, own currency to mint new coins, as opposed to proof-of-work which requires participants to commit computing power to advance blockchains.
Coinbase, based in San Francisco, is one of the largest crypto exchanges in the U.S., while Bison Trails provides blockchain infrastructure tools. Both companies are members of the Libra Association, the Facebook-led global stablecoin project.
Proof-of-stake is a type of consensus algorithm by which a cryptocurrency blockchain network aims to achieve distributed consensus. Unlike proof-of-work (PoW) mining, in a PoS network, cryptoholders with more coins have more power to validate transactions and process consensus.
According to a press release, the alliance believes there is not sufficient legal or regulatory clarity in the U.S. around staking yet, including how staking rewards are taxed and how entities should interpret securities laws for validation relationships.
The group will encourage policy makers and regulators like the U.S Securities and Exchanges Commission to address tax and compliance challenges for staking services providers.
“Proof of Stake is an increasingly important innovation that the crypto space as a whole is rapidly trending toward,” Sam Mcingvale, CEO of Coinbase Custody, said in the statement.
The announcement comes a day after Coinbase launched Coinbase Custody International Inc., a European entity for handling cryptocurrency deposits. The new entity will carry out “all staking activity performed by Coinbase,” the exchange said.
Disclosure Read More
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.