Huaxia Fund, a wholly-owned subsidiary of China Asset Management (ChinaAMC), is about to roll out staking services for its Ether exchange-traded fund (ETF). This latest action follows a similar policy reversal from Hong Kong’s Securities and Futures Commission (SFC) earlier this month. The SFC amended those regulations on April 7. That amendment cleared the path for staking alongside bitcoin in publicly listed crypto investment products.
Staking opportunities for Ether ETFs have provoked big time debates across the United States. Consumers and stakeholders are rushing to stake their flags, figuring out how they can benefit from it and what the regulatory implications are. Staking is the process of locking up crypto tokens to improve the efficiency and security of a blockchain network. It’s the process that allows investors to realize appealing yields.
Hong Kong's regulatory environment is viewed as proactive towards cryptocurrency companies, which has fueled substantial growth in the region's blockchain sector, marking a 250% increase since 2022. The SFC’s recent approval of staking is part of a larger movement to welcome cutting-edge Web3 technologies in a regulated environment.
"recognizes the potential benefits of staking in enhancing the security of blockchain networks and allowing investors to earn yields." - Hong Kong’s Securities and Futures Commission (SFC)
Bernstein Research expected the approval of staking for Ether ETFs under a crypto-friendly Trump admin since back in 12/2024. The SFC’s announcement over the last week matches up with this expectation, indicating a willingness to be more open to crypto-related financial products.
Bosera HashKey, another approved staking provider in Hong Kong since April 10, will launch its staking feature for its Ether ETF on May 15. OSL Digital Services (OSL) has been selected to provide custody and staking infrastructure for the fund. This partnership allows Bosera HashKey’s Ether ETF to benefit from the power of compound growth.
BlackRock, the asset manager, has been pointing to the success of Ether ETFs. They make clear that these ETFs are “less perfect” without including staking. The SFC’s announcement will likely clear the way for a wider array of Web3 products.
"The SFC’s announcement signals that more doors are opening — not just for staking, but for a wider range of Web3 products to take shape under a regulated and trusted framework," - Chen Wu, CEO of Hong Kong-based crypto exchange Ex.io
The SFC intends to allow entities such as centralized exchanges to provide crypto staking to their customers. The legislation is seen as another step to reinforce Hong Kong’s place as a progressive center of digital asset innovation.
