Is the US banning staking? - Episode 358 - by cryptohunt.it

Is the US banning staking?

Welcome to the Cryptohunt Jam, where you learn – in just a minute or two a day – what is happening in crypto and other game-changing ideas. As always: In plain English.

Today, back to some hot crypto and finance news: The US government may be banning the practice of staking.

If you don’t remember what it is, we recommend you skip back to episode 27 where we have a simple explanation. But for now, you just need to know the basics - staking is when a crypto holder invests their crypto to help validated transactions. In return, they get paid by those users who transact, effectively turning staking into a form of passive income.

And now - according to Coinbase’s CEO Brian Armstrong – the SEC, a US agency overseeing certain financial markets, might be making staking entirely illegal.

Just to understand how hard of a hit that would be to crypto, let’s look at a similar example. When you put money into a savings account, the bank pays you interest on it. Or if you buy stocks that pay dividends, the company provides that kind of passive income. Staking is effectively the equivalent of those in the crypto world. Or in other words: Making it illegal is like telling you that you can’t generate interest payments from your savings anymore.

But before you get too upset, consider the SEC’s perspective. Ever since crypto emerged, it has been playing catch-up with little to no actual oversight. People have been ripped off or lost money because they didn’t understand the risks. While this move may be a very aggressive one, it underlines that the agency is starting to take its job of consumer protection seriously.

But is it overstepping? Let’s wait and see what actually happens - and until then you can now, as always, make up your own mind.

And before we end today - thanks so much for tuning in every day. It means the world to us.

This podcast is produced by Cryptohunt.it, the easiest place to learn all about Web3.