Hong Kong considers allowing staking in Ethereum spot ETFs: Bloomberg – DiarioBitcoin

Although this measure would have been under discussion for several weeks, the reports come just on the eve of the possible arrival of ETFs Ethereum spot in the US market, which will not include staking systems.

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• ETFs may Ethereum in Hong Kong enable staking systems
• The Securities and Futures Commission From Hong Kong and issuers have been debating this possibility
• They possibly seek to boost trade in these products and take advantage of the US market.
• The SEC U.S. must give verdict on first batch of ETF applications Ethereum this week

The Hong Kong Securities and Futures Commission is considering including certain caveats for exchange-traded funds (ETFs) based on Ethereum, among which I would highlight the possibility for issuers to carry out staking activities with the available funds.

Possibility of staking

According to a report published by the news agency Bloombergsources with knowledge of the case assure that the issuers and the agency have been in communications in recent weeks to discuss this possibility, which would open a source of passive income for the funds and thus surpass the proposals under evaluation in the United States.

According to sources, talks are ongoing and there is currently no clear timeline for making a decision. The fact is that if this proposal is approved, it is estimated that the demand for ETFs Ethereum in Hong Kong increased considerably, especially given that some funds that support this cryptocurrency have not performed as expected since their launch.

Unlike Bitcoin, the network of Ethereum manages a validation mechanism based on staking, so interested parties can dispose of funds ETH in guarantee through the respective smart contract and thereby derive approximately 4% annual profits. The measure has been so popular that even exchanges and services allow users to participate in this dynamic, deriving dividends for participants based on the respective contribution.

Since ETFs are Ethereum a place where large amounts of funds are accumulated ETH, Opening the possibility of staking would enable a new channel to derive passive income, both for the benefit of the fund and the participants. Analysts consulted by Bloomberg They see it as viable for this to be approved, given that Hong Kong has maintained fairly tight regulations regarding escrow fund services.

Competing with the US market?

Reports on this possibility for ETFs Ethereum in Hong Kong come to place in what seems to be the countdown for the possible arrival of these funds to the US market, since the US Securities and Exchange Commission (SEC) He must give an official verdict in the coming days to a first batch of applications presented to his office.

Although the possibilities of approval seemed quite distant, this situation took a 180 degree turn after an apparent change in the perspective of the SEC, since this week it asked the administrators to submit the respective forms necessary for the possible approval of said products.

The stock exchanges and administrators reported to the SEC the forms 19b-4, in which they reported changes in trading rules for ETFs Ethereum cash. Recently, the agency held a meeting with issuers for the final registration document.

The analyst of Bloomberg, James Seyffart He highlighted that the only significant modification was the removal of the possibility of staking the funds’ assets. something that the agency could have problems with due to the problems seen with cryptocurrencies that operate under validation systems Proof-of-Stake (PoS).

In the midst of this entire process, the main beneficiary was precisely ETH in the main markets, since at the time of publication it is quoted at about USD $3,791 per unit, with an increase of 1.8% compared to yesterday and 29.1% in the last seven days.

For now, it remains to be seen what the response will be. SEC in relation to ETF applications Ethereum cash.

Article by Angel Di Matteo / DailyBitcoin

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