2024-05-24
Hong Kong’s Securities and Futures
Commission (SFC) is reportedly considering the possibility of allowing Ether
(ETH) staking for spot ETH exchange-traded funds (ETFs).
This move would set Hong Kong apart
from the United States, where staking has not been part of the plans for
prospective ETF issuers.
The SFC is discussing with crypto ETF
issuers in Hong Kong regarding the provision of staking services through
licensed platforms. These discussions are ongoing, and no specific timeline for
a decision has been announced yet.
If approved, staking could enhance
demand for Hong Kong’s spot-crypto ETFs. Hong Kong stock exchange launched Spot
Ethereum ETFs in April 2024.
Notably, this development could give
Hong Kong an advantage over the US, where spot Ethereum ETFs are allowed but without
staking options.
US issuers like Fidelity Investments
and Ark Investment Management have abandoned plans to stake the Ether they
would purchase for their proposed ETF products.
Staking allows investors to earn
passive income by locking tokens on the Ethereum network to validate
transactions. Currently, Ether staking has about 3.1% yield annually in the
form of ETH staking rewards.
Serra Wei, CEO of Aegis Custody,
believes that adding staking to spot-ETH ETFs would be a significant milestone
for Hong Kong. Aegis Custody provides custody technology solutions to banks in
the region.
