Hong Kong mulls nod for Ether ETF staking in contrast to US

The has held discussions with the city's ETF issuers about providing staking services via licensed platforms, after fielding proposals in recent weeks, according to people familiar with the matter.

The talks are ongoing and there's no clear timeline for a decision, the people added, asking to not be identified discussing private information. A spokesperson for the didn't immediately respond to a request for comment.

If approved, staking yields could bolster demand for Hong Kong's , which have met with lukewarm demand since launching in April. It could also give the Asian finance hub a head start on the US, where prospects have improved recently of a green light for spot-Ether ETFs - albeit without staking.

US issuers including and have scrapped plans for staking the Ether they would purchase for their proposed ETF products.

The decisions, while potentially smoothing the path with US regulators, may make the funds less attractive than buying Ether directly on crypto exchanges.

can earn passive income through staking, a process that involves locking tokens on the Ethereum network to help validate transactions. Ether staking currently pays out the equivalent of about 4% annually in the form of more coins.

Serra Wei, chief executive officer of , said discussions between Hong Kong ETF issuers and regulators on staking have been "healthy," adding that it would fit within the local regulatory regime.

"It would be a milestone for Hong Kong to add staking into spot-ETH ETFs," said Wei, who hasn't been involved in talks with the SFC. Aegis provides custody technology solutions to banks in Hong Kong.

Hong Kong is vying with the likes of Singapore and Dubai to become a digital-asset hub after rolling out a dedicated regulatory regime last year. Officials are trying to restore the city's reputation as a modern financial center following a crackdown on dissent that dulled its allure.

Source: Forex-Markets-Economic Times