In a major regulatory breakthrough, Coinbase announced on October 8, 2025, that New York residents can now stake their cryptocurrency holdings on the platform, marking the end of a years-long restriction in one of America’s most crypto-skeptical jurisdictions. The approval brings staking services to the Empire State after extensive negotiations with state regulators, finally granting New Yorkers access to passive income opportunities that most Americans have enjoyed for years.
This milestone represents more than just another state joining Coinbase’s staking program—it signals a fundamental shift in how one of the world’s most influential financial regulatory environments views proof-of-stake blockchain networks. New York’s Department of Financial Services (NYDFS) has historically taken a cautious, often restrictive approach to cryptocurrency services, making this approval particularly significant for the broader crypto industry’s legitimacy.
Seven Cryptocurrencies Now Available for Staking
New York residents can now earn yield by staking seven major cryptocurrencies through Coinbase: Ethereum, Solana, Cosmos, Cardano, Avalanche, Polkadot, and Polygon. This diverse selection provides exposure to multiple blockchain ecosystems, each offering different yield opportunities and risk profiles.
The most attractive yield comes from Cosmos (ATOM), offering an estimated 16% annual percentage yield (APY)—a substantial return that reflects the network’s inflation rate and validator economics. This high yield has made Cosmos staking particularly popular among crypto holders seeking income generation, though it’s important to note that high yields often come with correspondingly higher inflation rates that can offset nominal gains.
Ethereum staking, by far Coinbase’s most popular staking product nationwide, offers a more modest 1.9% estimated annual yield. While lower than Cosmos, Ethereum’s yield represents a stable return on the world’s second-largest cryptocurrency by market capitalization, with significantly lower inflation risk. Ethereum’s transition to proof-of-stake in 2022 created this staking opportunity, and institutional adoption of ETH staking has grown substantially as the network matures.
The other supported networks—Solana, Cardano, Avalanche, Polkadot, and Polygon—offer yields that typically range between 3-8% annually, depending on network participation rates, inflation schedules, and current staking demand. Each network has unique staking mechanics, lock-up periods, and slashing risks that investors should understand before committing funds.
Coinbase handles the technical complexity of running validator infrastructure, making staking accessible to retail investors who lack the expertise or capital to operate their own validators. Users simply hold their supported cryptocurrencies on Coinbase, opt into staking, and automatically begin earning rewards that compound over time.
Regulatory Journey: From Restriction to Approval
New York’s approval of crypto staking comes after years of regulatory uncertainty and restriction. The state’s cautious approach stems from its role as a global financial center and the NYDFS’s mandate to protect consumers in one of the world’s most sophisticated financial markets.
The regulatory breakthrough appears connected to recent leadership changes at NYDFS. The approval follows the September 2025 resignation of Adrienne Harris, New York’s top crypto regulator who oversaw a period of heightened enforcement and restrictive policies toward digital asset services. While Harris’s tenure saw important consumer protection measures, it also created frustration within the crypto industry over perceived regulatory overreach.
Coinbase credited Governor Kathy Hochul’s administration for providing the regulatory clarity that made staking approval possible. “Thanks to Governor Hochul’s leadership in embracing progress and providing clarity, this milestone marks a meaningful step forward in ensuring residents of the Empire State have access to the same economic opportunities already open to most other Americans,” Coinbase stated in its announcement.
This approval didn’t come without cost or controversy. In 2023, Coinbase paid a $100 million settlement to New York regulators to resolve compliance deficiencies related to its anti-money laundering and know-your-customer programs. That settlement, one of the largest ever imposed on a crypto exchange by state regulators, established a framework for enhanced oversight that likely paved the way for expanded service approvals like staking.
The regulatory journey highlights the complex relationship between crypto platforms and state financial regulators. While federal agencies like the SEC and CFTC have taken inconsistent approaches to crypto oversight, state regulators—particularly New York’s NYDFS through its BitLicense framework—have often served as the primary gatekeepers for crypto services in their jurisdictions.
The $130 Million Question: Four States Still Restricting Access
While New York’s approval is significant, Coinbase’s staking services remain unavailable in four states: California, New Jersey, Maryland, and Wisconsin. This continued restriction has real financial consequences for residents who miss out on substantial earning opportunities available to most Americans.
Coinbase estimates that residents in these four holdout states have collectively lost more than $130 million in potential staking rewards due to state-level bans still in effect. This figure represents the opportunity cost of regulatory caution—the income that crypto holders in these states could have earned if they had access to the same staking services available in 46 other states.
California’s absence from the approved states list is particularly notable given the state’s role as a technology hub and home to many crypto companies, including Coinbase itself. California’s financial regulators have taken a measured approach to crypto oversight, but concerns about consumer protection and the classification of staking services have prevented approval thus far.
New Jersey’s restriction is somewhat surprising given its proximity to New York and similar financial services infrastructure. The state’s Department of Banking and Insurance has historically been conservative in its approach to novel financial products, and staking services appear to fall into a regulatory gray area that hasn’t yet been resolved.
Maryland and Wisconsin represent smaller markets, but their continued restrictions reflect broader questions about how state banking regulators classify and oversee staking services. Is staking a form of lending that requires money transmission licenses? Is it a security that demands registration? These fundamental classification questions remain unresolved in some jurisdictions.
The state-by-state patchwork of staking regulations creates compliance challenges for crypto platforms and confusion for consumers. A California resident who wants to stake Ethereum must either move to another state, use a non-U.S. platform (with attendant tax and legal complications), or forgo the income opportunity entirely—an unsatisfying set of options in a market that increasingly values financial inclusion and access.
Implications for Crypto Regulation and Financial Access
New York’s approval of crypto staking carries implications that extend far beyond Coinbase and the Empire State. The decision establishes a precedent that other states will likely examine as they develop their own approaches to proof-of-stake blockchain services.
Regulatory momentum is building. When the most crypto-skeptical major jurisdiction in the United States approves staking services, it becomes harder for other states to justify continued restrictions. California, New Jersey, Maryland, and Wisconsin will face increasing pressure from constituents who see New Yorkers earning staking yields while they remain locked out of these opportunities.
The classification question is being answered. By approving staking, New York’s regulators have implicitly endorsed a classification framework that distinguishes staking from securities, lending, or other regulated financial activities that require separate licenses. This regulatory clarity could accelerate approvals in other jurisdictions that have been waiting to see how leading states handle the issue.
Consumer protection frameworks are maturing. New York’s approval likely includes operational requirements, consumer disclosures, and oversight mechanisms that will serve as a model for other states. The combination of Coinbase’s 2023 compliance settlement and the new staking approval suggests that regulators have developed a supervision framework they believe adequately protects consumers while allowing innovation.
Financial inclusion arguments are gaining traction. Coinbase’s framing of staking access as an “economic opportunity” available to “most other Americans” puts holdout states in a difficult position. Denying residents access to income-generating opportunities that are widely available elsewhere becomes harder to justify, especially as crypto adoption grows and institutional acceptance increases.
The approval also validates Coinbase’s strategy of engaging with regulators state-by-state rather than waiting for federal clarity that may never come. While a comprehensive federal framework for crypto regulation would be ideal, the state-by-state approach is producing results, albeit slowly and inconsistently.
What This Means for Crypto Investors
For New York residents who hold cryptocurrencies, the immediate impact is straightforward: they can now earn passive income on their digital asset holdings without moving to another state or using offshore platforms. This access fundamentally changes the economics of crypto ownership in New York.
Ethereum holders can now earn approximately 1.9% annually on their holdings, turning idle assets into income-generating investments. For someone holding $50,000 in ETH, this translates to roughly $950 in annual staking rewards (before fees and taxes), compounding over time as rewards are automatically restaked.
Higher-yield seekers can explore Cosmos staking at 16% APY, though they should understand the inflation dynamics that support such yields. A $10,000 investment in staked ATOM could generate $1,600 in annual rewards, though ATOM’s price volatility and inflation rate require careful consideration.
Portfolio diversification becomes easier with access to seven different staking options across multiple blockchain ecosystems. Investors can allocate to lower-yield, lower-risk options like Ethereum while maintaining exposure to higher-yield networks like Cosmos, Solana, or Cardano.
Tax implications remain complex. Staking rewards are generally considered taxable income when received, valued at their fair market value at the time of receipt. New York residents should consult tax professionals to understand how staking income affects their state and federal tax obligations, as the IRS has provided limited guidance on crypto staking taxation.
Looking ahead, New York’s approval may accelerate the development of more sophisticated staking products, including liquid staking derivatives, automated yield optimization, and institutional staking services. As regulatory clarity improves, financial innovation typically follows.
For residents of California, New Jersey, Maryland, and Wisconsin, New York’s approval serves as both encouragement and frustration—proof that regulatory approval is possible, but a reminder that they remain excluded from opportunities available to most Americans. The pressure on these states to follow New York’s lead will only intensify as more residents realize the financial opportunities they’re missing.
The crypto industry has long argued that clear, reasonable regulation would unlock innovation and protect consumers more effectively than outright bans or regulatory uncertainty. New York’s staking approval suggests that at least some regulators are beginning to agree, creating pathways for legitimate crypto services to operate under appropriate supervision rather than being shut out entirely.
