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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.
Working Towards a Harmonious and Controlled Step
Asset managers in Hong Kong are actively working to include staking features in spot Ethereum ETFs. HashKey, the co-manager of spot Bitcoin and Ethereum ETFs with Bosera, is preparing a proposal to explore staking. HashKey Exchange CEO Livio Weng stated that their plans aim to earn rewards while effectively managing risks. Although specific details are still being discussed, the goal is to progress in a harmonious and controlled manner.
Blockchain infrastructure provider Blockdaemon is also in talks with Hong Kong ETF issuers and custodians to offer staking services for these ETFs. Blockdaemon APAC Sales Manager Glenn Woo expressed optimism that staking approval is imminent. According to Woo, there is a consensus among industry participants that the missing piece in current ETF offerings is staking, and its approval is expected soon.
Crypto ETF Performance
The performance of Hong Kong’s spot Crypto ETFs is lackluster compared to those in the US. Despite initial enthusiasm, trading volumes for Hong Kong’s spot Bitcoin ETFs are significantly low. For instance, last Thursday, the total daily trading volume for three Hong Kong spot Bitcoin ETFs was $6.08 million, while the US saw $1.42 billion in trading volume for 11 spot Bitcoin ETFs on the same day. This disparity indicates that Hong Kong needs to find ways to boost the competitiveness of its ETF market.
Introducing staking rewards could provide a significant competitive advantage for Hong Kong’s spot Ethereum ETFs. The US Securities and Exchange Commission has clearly stated that it will not allow staking features in the foreseeable future.
This restriction offers Hong Kong an opportunity to attract more investors by providing advantages not available in the US market. Siu emphasized that competitive pricing and innovative features like staking are crucial for Hong Kong to attract both Eastern and Western buyers.
Importance for Ethereum ETF Investors
Woo reiterated the importance of staking for potential Ethereum ETF investors, highlighting that missing out on staking rewards, which can range from 3% to 4%, is significant in terms of opportunity cost.
The Hong Kong government and regulatory bodies are aware of this gap and are motivated to expedite the approval process. Effectively communicating the strategy and benefits of staking to regulatory bodies is essential for advancing this initiative.
