Cryptocurrency exchange HashKey has received approval from Hong Kong regulators to offer staking services, potentially broadening the institutional appeal of proof-of-stake investments such as the spot Ether exchange-traded funds (ETFs).

HashKey was granted approval on April 10 after the Hong Kong Securities and Futures Commission (SFC) provided regulatory guidance on staking services to Licensed Virtual Asset Trading Platforms (VATPs) and authorized funds, the company disclosed on social media. 

HashKey said it had become “one of the first” regulated Hong Kong exchanges to offer staking services.

Source: HashKey Group

The approval was granted after the China Securities Regulatory Commission (CSRC) recognized the potential benefits of crypto staking services, the SFC said.

CSRC “is aware of the potential benefits of staking in enhancing the security of blockchain networks and allowing investors to earn returns from virtual assets in a regulated market environment,” the SFC said, according to a translated version of the announcement that appeared on Asian media outlet PANews. 

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Taking the lead on ETH staking

The SFC approval means HashKey can take the lead in offering staking services for spot Ether (ETH) ETFs, according to the exchange’s managing director, Terence Pu.

“In the near future, investors will not only be able to hold Ether ETFs to obtain staking income but also directly hold ETH and obtain additional income through our staking services,” Hu said in a translated version of his statement. 

Hong Kong approved its first Ether and Bitcoin (BTC) ETFs in April of last year, giving institutional investors access to an in-kind subscription model for digital assets.

Hong Kong is ahead of the curve in allowing ETF investors to earn a passive yield on their digital assets. In the United States, the Securities and Exchange Commission (SEC) green-lighted spot Ether ETFs last year but did not allow staking strategies to be included.

For many US investors, staking is the missing link that could make US-based Ether ETFs more attractive to institutional investors. 

With the election of US President Donald Trump and the installation of a pro-crypto SEC Chair, investors are growing confident that staking services are coming to the US Ether ETFs in the near future.

Source: James Seyyfart

Based on Bloomberg analyst James Seyffart’s potential timeline, approvals could be granted as early as May.

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