A cryptocurrency exchange has obtained authorization from Hong Kong regulators to provide staking services, which could enhance the institutional attractiveness of proof-of-stake investments, including spot Ether exchange-traded funds (ETFs).
The approval was granted on April 10 after the Hong Kong Securities and Futures Commission (SFC) issued regulatory guidelines pertaining to staking services for Licensed Virtual Asset Trading Platforms (VATPs) and authorized funds, as highlighted by the company on social media.
They indicated that they are now “one of the first” regulated exchanges in Hong Kong to provide staking services.
Image Credit: HashKey Group
This approval followed the acknowledgment from the China Securities Regulatory Commission (CSRC) regarding the advantages of crypto staking services, according to the SFC.
According to a translated announcement, the SFC noted that the CSRC “recognizes the potential benefits of staking for enhancing the security of blockchain networks and enabling investors to earn returns on virtual assets within a regulated market setting.”
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Pioneering ETH Staking
With the SFC’s endorsement, the exchange can lead in offering staking services for spot Ether (ETH) ETFs, as stated by the exchange’s managing director, Terence Pu.
He mentioned, “In the near future, investors will not just be able to hold Ether ETFs for staking income but can also directly hold ETH and receive additional earnings through our staking services,” according to the translated version of his remarks.
Last April, Hong Kong approved its initial Ether and Bitcoin (BTC) ETFs, providing institutional investors access to an in-kind subscription model for digital assets.
Hong Kong is taking the lead by allowing ETF investors to earn passive yields on their digital holdings. In contrast, the U.S. Securities and Exchange Commission (SEC) approved spot Ether ETFs last year but has yet to authorize staking strategies.
For many investors in the U.S., staking represents the critical element that could make domestic Ether ETFs more appealing to institutional backers.
Following the election of U.S. President Donald Trump and the appointment of a pro-crypto SEC Chair, there’s growing optimism among investors that staking services will soon make their way into U.S. Ether ETFs.
Image Credit: James Seyyfart
According to analyst James Seyffart’s suggested timeline, approvals may come as early as May.
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