Hong Kong Might Allow Staking For Ethereum Spot ETF in 2024

Hong Kong asset managers are reportedly working to include staking in their spot ether exchange-traded funds (ETFs). The goal is to get the staking reward feature approved by the end of this year. 

Animoca Brands Chairman, Yat Siu, confirmed these developments in a recent interview with The Block, stating that Hong Kong is “having discussions now for ETH staking.”

He noted that if progress stalls, the outcome of U.S. elections might influence the speed of adoption there. “There’s an optimistic side of me that wants it to happen within the year,” said Siu.

HashKey’s Strategic Proposal

HashKey, which manages bitcoin and ether ETFs in Hong Kong alongside Bosera, is also preparing to introduce ether staking. CEO Livio Weng mentioned that they have a plan to earn rewards without increasing risks. 

“We’ve come up with a plan designed to earn rewards without necessarily increasing risks,” Weng stated. 

Meanwhile, Glenn Woo, head of sales for APAC at Blockdaemon, revealed that the company is in talks with Hong Kong ETF issuers and custodians to explore staking services. Woo highlighted the industry's positive outlook on getting ether staking approved. 

“Based on my discussion with participants, issuers, VATPs, and custodians, we have a positive outlook on getting ether staking approved as well,” Woo said.

Hong Kong approved the approved Bitcoin and Ethereum spot ETFs on April 15.

The Potential of Staking

Staking involves users validating transactions on a proof-of-stake blockchain, such as Ethereum, by locking their tokens for a certain period in exchange for rewards. This process is popular among cryptocurrency investors for generating passive returns.

Industry insiders believe that incorporating staking into spot ether ETFs could increase investor returns and enhance the security and decentralization of blockchain networks. 

HashKey's initiative could set a precedent for other asset managers and ETF issuers, pushing the entire sector towards greater adoption of staking. The possibility of earning rewards from staking could make ether ETFs more attractive to a wider range of investors.