Coinbase opens staking rewards on Tezos holdings to all U.S. customers

Coinbase announced all U.S. customers are now eligible to receive Tezos ($XTZ) inflation rewards. Coinbase will automatically stake (or in the case of Tezos, bake) XTZ tokens held on the exchange and distribute the inflation rewards to customers in proportion to their holdings. Previously, the exchange only offered staking-as-a-service to institutions through its Coinbase Custody branch.

Why it matters:

• Governance concerns: Tezos’ on-chain governance model enables bakers to vote on upgrade proposals and determine the future direction of the protocol. By including all retail holdings in their staking total, Coinbase amassed a significant amount of voting power. Coinbase could remain neutral during on-chain voting sessions, but customers (and the protocol) would benefit if offered the opportunity to delegate votes to a baker of their choice.
• Tax implications: The tax ramifications on staking rewards remain unclear. The IRS released a guideline on how the agency intends to tax crypto airdrops last month, a mere five years after its first report. Staking is still too new to receive similar guidance at this point. But with cryptocurrency gaining attention, the IRS could issue tax implications on staking rewards soon rather than take another five-year hiatus.