diff --git a/core/contracts/shared/IReceiveApproval.sol b/core/contracts/shared/IReceiveApproval.sol
new file mode 100644
index 000000000..175e32eb8
--- /dev/null
+++ b/core/contracts/shared/IReceiveApproval.sol
@@ -0,0 +1,16 @@
+// SPDX-License-Identifier: GPL-3.0-only
+
+pragma solidity ^0.8.20;
+
+/// @notice An interface that should be implemented by contracts supporting
+///         `approveAndCall`/`receiveApproval` pattern.
+interface IReceiveApproval {
+    /// @notice Receives approval to spend tokens. Called as a result of
+    ///         `approveAndCall` call on the token.
+    function receiveApproval(
+        address from,
+        uint256 amount,
+        address token,
+        bytes calldata extraData
+    ) external;
+}
diff --git a/core/contracts/staking/TokenStaking.sol b/core/contracts/staking/TokenStaking.sol
new file mode 100644
index 000000000..9866ce02b
--- /dev/null
+++ b/core/contracts/staking/TokenStaking.sol
@@ -0,0 +1,80 @@
+// SPDX-License-Identifier: GPL-3.0-only
+
+pragma solidity ^0.8.20;
+
+import "@openzeppelin/contracts/token/ERC20/IERC20.sol";
+import "@openzeppelin/contracts/token/ERC20/utils/SafeERC20.sol";
+import "../shared/IReceiveApproval.sol";
+
+/// @title TokenStaking
+/// @notice A token staking contract for a specified standard ERC20 token. A
+///         holder of the specified token can stake its tokens to this contract
+///         and recover the stake after undelegation period is over.
+contract TokenStaking is IReceiveApproval {
+    using SafeERC20 for IERC20;
+
+    IERC20 internal immutable token;
+
+    mapping(address => uint256) public balanceOf;
+
+    event Staked(address indexed staker, uint256 amount);
+
+    constructor(IERC20 _token) {
+        require(
+            address(_token) != address(0),
+            "Token can not be the zero address"
+        );
+
+        token = _token;
+    }
+
+    /// @notice Receives approval of token transfer and stakes the approved
+    ///         amount or adds the approved amount to an existing stake.
+    /// @dev Requires that the provided token contract be the same one linked to
+    ///      this contract.
+    /// @param from The owner of the tokens who approved them to transfer.
+    /// @param amount Approved amount for the transfer and stake.
+    /// @param _token Token contract address.
+    function receiveApproval(
+        address from,
+        uint256 amount,
+        address _token,
+        bytes calldata
+    ) external override {
+        require(_token == address(token), "Unrecognized token");
+        _stake(from, amount);
+    }
+
+    /// @notice Stakes the owner's tokens in the staking contract.
+    /// @param amount Approved amount for the transfer and stake.
+    function stake(uint256 amount) external {
+        _stake(msg.sender, amount);
+    }
+
+    /// @notice Returns minimum amount of staking tokens to participate in
+    ///         protocol.
+    function minimumStake() public pure returns (uint256) {
+        // TODO: Fetch this param from "parameters" contract that stores
+        // governable params.
+        return 1;
+    }
+
+    /// @notice Returns maximum amount of staking tokens.
+    function maximumStake() public pure returns (uint256) {
+        // TODO: Fetch this param from "parameters" contract that stores
+        // governable params.
+        return 100 ether;
+    }
+
+    function _stake(address staker, uint256 amount) private {
+        require(amount >= minimumStake(), "Amount is less than minimum");
+        require(amount <= maximumStake(), "Amount is greater than maxium");
+        require(staker != address(0), "Can not be the zero address");
+
+        balanceOf[staker] += amount;
+
+        // TODO: Mint stBTC token.
+        emit Staked(staker, amount);
+        token.safeTransferFrom(staker, address(this), amount);
+    }
+}
diff --git a/core/contracts/test/TestToken.sol b/core/contracts/test/TestToken.sol
new file mode 100644
index 000000000..943d20bd6
--- /dev/null
+++ b/core/contracts/test/TestToken.sol
@@ -0,0 +1,31 @@
+// SPDX-License-Identifier: GPL-3.0-or-later
+
+pragma solidity 0.8.20;
+
+import "@openzeppelin/contracts/token/ERC20/ERC20.sol";
+import "../shared/IReceiveApproval.sol";
+
+contract Token is ERC20 {
+    constructor() ERC20("Test Token", "TEST") {}
+
+    function mint(address account, uint256 value) external {
+        _mint(account, value);
+    }
+
+    function approveAndCall(
+        address spender,
+        uint256 amount,
+        bytes memory extraData
+    ) external returns (bool) {
+        if (approve(spender, amount)) {
+            IReceiveApproval(spender).receiveApproval(
+                msg.sender,
+                amount,
+                address(this),
+                extraData
+            );
+            return true;
+        }
+        return false;
+    }
+}
diff --git a/core/deploy/01_deploy_acre.ts b/core/deploy/01_deploy_acre.ts
index 3266a1986..6b3121222 100644
--- a/core/deploy/01_deploy_acre.ts
+++ b/core/deploy/01_deploy_acre.ts
@@ -1,7 +1,7 @@
 import type { HardhatRuntimeEnvironment } from "hardhat/types"
 import type { DeployFunction } from "hardhat-deploy/types"
 
-const func: DeployFunction = async function (hre: HardhatRuntimeEnvironment) {
+const func: DeployFunction = async (hre: HardhatRuntimeEnvironment) => {
   const { deployments } = hre
   const { log } = deployments
 
diff --git a/core/package.json b/core/package.json
index 2b5649c0b..6b08387c1 100644
--- a/core/package.json
+++ b/core/package.json
@@ -56,5 +56,8 @@
     "ts-node": ">=8.0.0",
     "typechain": "^8.1.0",
     "typescript": ">=4.5.0"
+  },
+  "dependencies": {
+    "@openzeppelin/contracts": "^5.0.0"
   }
 }
diff --git a/core/test/staking/TokenStaking.test.ts b/core/test/staking/TokenStaking.test.ts
new file mode 100644
index 000000000..c6b458bf9
--- /dev/null
+++ b/core/test/staking/TokenStaking.test.ts
@@ -0,0 +1,98 @@
+import { loadFixture } from "@nomicfoundation/hardhat-toolbox/network-helpers"
+import { ethers } from "hardhat"
+import { expect } from "chai"
+import { WeiPerEther } from "ethers"
+import { HardhatEthersSigner } from "@nomicfoundation/hardhat-ethers/signers"
+import type { Token, TokenStaking } from "../../typechain"
+
+async function tokenStakingFixture() {
+  const [_, tokenHolder] = await ethers.getSigners()
+  const StakingToken = await ethers.getContractFactory("Token")
+  const token = await StakingToken.deploy()
+
+  const amountToMint = WeiPerEther * 10000n
+
+  token.mint(tokenHolder, amountToMint)
+
+  const TokenStaking = await ethers.getContractFactory("TokenStaking")
+  const tokenStaking = await TokenStaking.deploy(await token.getAddress())
+
+  return { tokenStaking, token, tokenHolder }
+}
+
+describe("TokenStaking", () => {
+  let tokenStaking: TokenStaking
+  let token: Token
+  let tokenHolder: HardhatEthersSigner
+
+  beforeEach(async () => {
+    ;({ tokenStaking, token, tokenHolder } =
+      await loadFixture(tokenStakingFixture))
+  })
+
+  describe("staking", () => {
+    const amountToStake = WeiPerEther * 10n
+
+    describe("when staking via staking contract directly", () => {
+      beforeEach(async () => {
+        // Infinite approval for staking contract.
+        await token
+          .connect(tokenHolder)
+          .approve(await tokenStaking.getAddress(), ethers.MaxUint256)
+      })
+
+      it("should stake tokens", async () => {
+        const tokenHolderAddress = await tokenHolder.getAddress()
+        const tokenBalanceBeforeStake =
+          await token.balanceOf(tokenHolderAddress)
+
+        await expect(tokenStaking.connect(tokenHolder).stake(amountToStake))
+          .to.emit(tokenStaking, "Staked")
+          .withArgs(tokenHolderAddress, amountToStake)
+        expect(await tokenStaking.balanceOf(tokenHolderAddress)).to.be.eq(
+          amountToStake,
+        )
+        expect(await token.balanceOf(tokenHolderAddress)).to.be.eq(
+          tokenBalanceBeforeStake - amountToStake,
+        )
+      })
+
+      it("should revert if the staked amount is less than required minimum", async () => {
+        await expect(
+          tokenStaking.connect(tokenHolder).stake(0),
+        ).to.be.revertedWith("Amount is less than minimum")
+      })
+
+      it("should revert if the staked amount is grater than maxium stake amount", async () => {
+        const maxAmount = await tokenStaking.maximumStake()
+
+        await expect(
+          tokenStaking.connect(tokenHolder).stake(maxAmount + 1n),
+        ).to.be.revertedWith("Amount is greater than maxium")
+      })
+    })
+
+    describe("when staking via staking token using approve and call pattern", () => {
+      it("should stake tokens", async () => {
+        const tokenHolderAddress = await tokenHolder.getAddress()
+        const tokenBalanceBeforeStake =
+          await token.balanceOf(tokenHolderAddress)
+        const tokenStakingAddress = await tokenStaking.getAddress()
+
+        await expect(
+          token
+            .connect(tokenHolder)
+            .approveAndCall(tokenStakingAddress, amountToStake, "0x"),
+        )
+          .to.emit(tokenStaking, "Staked")
+          .withArgs(tokenHolderAddress, amountToStake)
+        expect(await tokenStaking.balanceOf(tokenHolderAddress)).to.be.eq(
+          amountToStake,
+        )
+        expect(await token.balanceOf(tokenHolderAddress)).to.be.eq(
+          tokenBalanceBeforeStake - amountToStake,
+        )
+      })
+    })
+  })
+})
diff --git a/core/yarn.lock b/core/yarn.lock
index e2d8e3206..f61f4d6f0 100644
--- a/core/yarn.lock
+++ b/core/yarn.lock
@@ -879,6 +879,11 @@
   resolved "https://registry.yarnpkg.com/@nomiclabs/hardhat-waffle/-/hardhat-waffle-2.0.6.tgz#d11cb063a5f61a77806053e54009c40ddee49a54"
   integrity sha512-+Wz0hwmJGSI17B+BhU/qFRZ1l6/xMW82QGXE/Gi+WTmwgJrQefuBs1lIf7hzQ1hLk6hpkvb/zwcNkpVKRYTQYg==
 
+"@openzeppelin/contracts@^5.0.0":
+  version "5.0.0"
+  resolved "https://registry.yarnpkg.com/@openzeppelin/contracts/-/contracts-5.0.0.tgz#ee0e4b4564f101a5c4ee398cd4d73c0bd92b289c"
+  integrity sha512-bv2sdS6LKqVVMLI5+zqnNrNU/CA+6z6CmwFXm/MzmOPBRSO5reEJN7z0Gbzvs0/bv/MZZXNklubpwy3v2+azsw==
+
 "@openzeppelin/defender-admin-client@^1.48.0":
   version "1.49.0"
   resolved "https://registry.yarnpkg.com/@openzeppelin/defender-admin-client/-/defender-admin-client-1.49.0.tgz#ed07318ccba10ac8a8a33cf594fc18b7ab5889f9"