Hong Kong regulators are reportedly set to approve staking features for Ethereum spot exchange-traded funds (ETFs). The development comes as the region continues its push to establish itself as a crypto hub.
Andrew Vranjes, Blockdaemon’s Global Director and Vice President, recently discussed this potential approval during an interview at Token2049 in Singapore.
Vranjes revealed that Blockdaemon is actively working with spot crypto ETF issuers in Hong Kong to design staking solutions that comply with regulatory requirements.
Progress in Ethereum Spot ETFs in Hong Kong
Vranjes was optimistic about the progress, indicating that regulators could allow staking under specific guidelines. He suggested that initial approval could be limited to certain categories of investors, such as accredited investors, before potentially expanding to a broader market.
“We are positive because of the level of conversation,” Vranjes said, noting that discussions between Blockdaemon, ETF issuers and regulators are ongoing, involving detailed documentation and regulatory review.
Vranjes notably revealed that Blockdaemon is deeply engaged in discussions with customers and regulators, exchanging extensive documents to ensure that the proposed staking solutions meet regulatory standards.
He suggested that an official announcement regarding Ethereum staking for spot ETFs in Hong Kong could be imminent, noting that the current phase involves meticulous planning and compliance checks.
“We are in a very fine-grained reflection phase. I think we are closer to the announcement than further away at this stage,” Vranjes noted.
ETH Spot ETF Performance So Far
Trading flows on Hong Kong’s spot crypto ETFs are significantly lower than those in the United States. For example, the combined trading volume of the three spot Ethereum ETFs in Hong Kong stood at $30,740 on Tuesday (September 17), with no daily flows recorded.
In contrast, nine ETH ETFs in the United States recorded a combined trading volume of $176.26 million and daily net outflows of $15.11 million on the same day, according to data from SosoValue.
📊 Ethereum ETF Tracking | 2024-09-17
🟥 Total daily net inflow – $15.11M
💰 Total value traded $176.26M
🏦 Total net assets $6.41 billion
📊 ETF Market Value Ratio 2.27%🥇 Net Inflows/Outflows for each ETF
🟩 ETH + $2.77M
⬜️ ETH 0 $
⬜️ 0 $ ETHA
⬜️ ETHV $0
⬜️ 0 $ CETH
⬜️ QETH… pic.twitter.com/IXlCkAr2HI— SoSoValue Research (@SoSoValue) September 18, 2024
Vranjes suggested that Hong Kong could potentially approve Ethereum staking for ETFs before the US, noting that it wouldn’t surprise him.
If Hong Kong successfully rolls out Ethereum staking for spot ETFs, it could set a precedent, potentially influencing other markets.
The United States, which is currently seeing higher trading volumes in the crypto ETF space, may be forced to adopt similar measures. This move could also strengthen Ethereum’s position in the global market, providing investors with additional ways to generate returns.
Featured image created with DALL-E, chart by TradingView
