World Crypto Global
- Written by: Jared Kirui
- Fri, 24 May 2024
- Israel
Hong Kong is considering allowing staking forexchange-traded funds (ETFs) investing directly in ether. The Securities andFutures Commission (SFC) of Hong Kong is engaging the citys cryptocurrency ETFissuers about providing staking services through licensed platforms, The BusinessTimes reported.Passive Crypto Income This potential regulatory change could open a newsource of passive income for investors, positioning Hong Kong ahead of the US,where such offering is restricted. Staking offers investors a way to earnpassive income by locking tokens on the Ethereum network to help validatetransactions, currently yielding about 4% annually in additional coins.If the SFC approves the staking yields, it couldsignificantly enhance the attractiveness of Hong Kongs spot-crypto ETFs, whichhave experienced moderate demand since their launch in April. This move couldgive Hong Kong a competitive edge over the US, which recently approved spotether ETFs applications by Nasdaq, Cboe, and NYSE. Hong Kong is actively positioning itself as a digitalasset hub, competing with cities like Singapore and Dubai. This follows theimplementation of a dedicated regulatory regime last year aimed at rejuvenatingthe citys status as a financial center after a period of politicalunrest.Beyond ETFs, Hong Kong is reviewing severalapplications to increase the number of licensed digital asset exchanges.Additionally, it is developing a framework for stablecoins, which are typicallypegged to fiat currencies and backed by reserves of cash and bonds.In a significant development, the US SEC approved applications from major exchanges like Nasdaq, CBOE, and the NYSE to listETFs tied to the price of ether yesterday (Thursday). Thismilestone potentially paves the way for the launch of these funds later inthe year, pending regulatory formalities and investor disclosures.US Grants Partial Approval for Ether ETFsAs the SEC deadline to decide the fate of severalapplications for ether ETFs approached, major asset management firms,including BlackRock, Grayscale, and Bitwise, made significant adjustments totheir applications. These adjustments entailed removing provisions for staking.While staking offers an avenue for generating passive income, the US regulators view it as constituting the offering ofunregistered securities. Hence, companies like BlackRock have explicitly statedin their amended filings that they will not engage in actions related tostaking or additional yield generation using the ether held by their ETFs.This article was written by Jared Kirui at www.financemagnates.com.
