According to Animoca Brands Chairman Yat Siu, Hong Kong is exploring the integration of staking rewards into spot Ethereum ETFs. Siu believes there is a possibility that the staking issue will be approved by the end of this year.
He mentioned that discussions about Ethereum staking are ongoing and that the approval of staking in Asia, particularly in Hong Kong, is likely to occur before the US. This move is seen as a significant development in the region’s financial environment.
Hong Kong Asset Managers Explore Staking Features in Ethereum ETFs
Asset managers in Hong Kong, including HashKey and Blockdaemon, are actively pursuing the integration of staking features into spot Ethereum ETFs. HashKey, co-manager of spot Bitcoin and Ethereum ETFs with Bosera, is preparing a proposal to incorporate staking. According to HashKey Exchange CEO Livio Weng, their initiative aims to leverage staking rewards while managing risks effectively. Specific details are still under discussion, with a focus on advancing in a controlled and coordinated manner.
Blockchain infrastructure provider Blockdaemon is also engaged in discussions with Hong Kong ETF issuers and custodians to provide staking services for these ETFs. Glenn Woo, Blockdaemon’s APAC Sales Manager, is optimistic about the imminent approval of staking. Woo notes that industry participants agree on the potential of staking to enhance ETF offerings, anticipating regulatory approval in the near future.
Enhancing Hong Kong’s Crypto ETF Competitiveness with Staking Rewards
Hong Kong’s spot Crypto ETFs have struggled to match the trading volumes seen in the US, particularly evident in the disparity between Hong Kong and US spot Bitcoin ETF trading volumes. For example, on a recent Thursday, Hong Kong’s three spot Bitcoin ETFs collectively traded $6.08 million, while the US recorded $1.42 billion across 11 similar ETFs. This performance gap underscores the need for Hong Kong to enhance its ETF market competitiveness.
Introducing staking rewards could potentially provide a substantial advantage for Hong Kong’s spot Ethereum ETFs. Unlike the US Securities and Exchange Commission’s stance against staking features, Hong Kong has an opportunity to attract investors by offering unique benefits not available in other markets. According to Siu, competitive pricing and innovative features such as staking are pivotal for Hong Kong to appeal to investors from both Eastern and Western markets alike.
Hong Kong Push for Ethereum ETFs with Staking Rewards
Glenn Woo emphasized the critical role of staking rewards for prospective Ethereum ETF investors, noting that the potential 3% to 4% rewards represent a significant opportunity cost for those not participating in staking.
Aware of this competitive gap, Hong Kong’s government and regulatory bodies are motivated to accelerate the approval process for incorporating staking features into Ethereum ETFs. Effectively communicating the strategy and benefits of staking to regulatory bodies will be crucial in advancing this initiative.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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