As US fund managers update their fund filings to eliminate Ethereum staking in spot ETFs, Hong Kong is considering allowing institutional liquid ETH staking.
Hong Kong is positioning itself as the most crypto-friendly jurisdiction compared to the United States.
In addition to approving the launch of Bitcoin and Ethereum spot ETFs under the in-kind redemption model, which was rejected by the US Securities and Exchange Commission (SEC), China’s special administrative region is also considering authorizing ether staking within these listed investment vehicles.
Canadian programming channel BNN Bloomberg reported recently that the Securities and Futures Commission (SFC) of Hong Kong is considering allowing institutional investors Participate in Ethereum staking through ETFs listed on the Hong Kong Stock Exchange.
The channel said the securities regulator is holding talks with fund issuers in the city and that these talks are focused on the inclusion of ETH staking services in exchange-traded funds through authorized platforms.
Ethereum staking could increase the attractiveness of ETFs
According to people familiar with the matter, the inclusion of staking services in cryptocurrency ETFs could increase the attractiveness of these financial vehicles, as well as providing an avenue for institutional investors to participate in the validation of the blockchain network.
In October last year, CoinDesk published an article highlighting the huge potential that allowing staking in spot ETFs could have in inducing demand from traders and institutional investors.
Staking, the mechanism that helps maintain the security of the Proof of Stake (PoS) network, can provide investors with a passive income and improve the performance of your ETF holdings, so this is a substantial addition that could increase the attractiveness of these listed investment vehicles.
Market observers and experts have also pointed out that the addition of ETH staking to ETFs could play into Hong Kong's hands and Elevate the Asian financial hub's leadership in the digital asset marketAccording to BNN Bloomberg, ETH staking could give the city a huge competitive advantage over the United States.
In contrast, in the North American powerhouse, fund issuers have modified their filings to eliminate ETH staking amid regulatory uncertainty surrounding the cryptocurrency. However, experts believe that this could erode the attractiveness of spot ETFs, which may be approved in this market.
