Regulators in Hong Kong are reportedly nearing the approval of staking features for spot Ethereum exchange-traded funds (ETFs). This move is part of the region’s ongoing initiative to position itself as a leading crypto hub.
Andrew Vranjes, Blockdaemon’s Head of International and Vice President, recently discussed this potential approval during an interview at the Token2049 conference in Singapore.
Vranjes shared that Blockdaemon has been in active collaboration with local crypto ETF issuers in Hong Kong to create staking solutions that adhere to regulatory standards.
Advancements in Ethereum Spot ETFs in Hong Kong
Vranjes expressed hopefulness regarding the advancements, suggesting that regulators might permit staking under specific conditions. He alluded to the possibility of initial approval being confined to particular categories of investors, such as accredited investors, before extending to a wider audience.
“We’re optimistic due to the depth of discussions,” Vranjes mentioned, highlighting the ongoing dialogues between Blockdaemon, ETF issuers, and regulators, which involve meticulous documentation and regulatory evaluation.
Vranjes specifically indicated that Blockdaemon is heavily involved in dialogues with both clients and regulators, sharing extensive documents to ensure that the proposed staking solutions comply with regulatory expectations.
He proposed that a formal announcement regarding Ethereum staking for spot ETFs in Hong Kong could be forthcoming, underscoring that the current stage emphasizes careful planning and compliance assessments.
“We’re in that precise movement. I believe we’re closer to the announcement than we are further away at this point,” Vranjes remarked.
Performance of ETH Spot ETFs So Far
The flow of Hong Kong’s spot crypto ETFs is considerably trailing behind that of the US. For example, the total trading volume for the three spot Ethereum ETFs in Hong Kong reached $30,740 as of Tuesday (September 17), with no daily inflows reported.
In stark contrast, nine ETH ETFs in the US experienced a combined trading volume of $176.26 million and net daily outflows of $15.11 million the same day, according to SosoValue data.
Ethereum ETF Tracker | 2024-09-17
Daily Total Net Inflow -$15.11M
Total Value Traded $176.26M
Total Net Assets $6.41B
Net Inflows/Outflows for Each ETF
ETH +$2.77M
ETHW $0
— SoSoValue Research (@SoSoValue) September 18, 2024
Vranjes suggested that it is conceivable for Hong Kong to approve Ethereum staking for ETFs ahead of the US, stating that it wouldn’t surprise him.
If Hong Kong successfully implements Ethereum staking for spot ETFs, it could set a significant precedent, potentially impacting other markets.
The United States, currently leading in crypto ETF trading volumes, could face pressure to adopt similar strategies. This initiative could further enhance Ethereum’s status in the global marketplace, providing investors with more options for generating returns.
Featured image created with DALL-E, Chart from TradingView
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