Source: Cointelegraph Original: "{title}"
Hua Xia Fund is about to launch staking services for its Ethereum (ETH) ETF, becoming the second fund in Hong Kong to offer such services. OSL Digital Services (OSL) will provide custody and staking infrastructure for the fund.
According to OSL's announcement, the staking feature will go live on May 15, transforming the ETF from a purely passive investment tool into an "active participant" in the Ethereum ecosystem. Hua Xia Fund is a subsidiary of China Asset Management (ChinaAMC), which first launched the Ethereum ETF in April 2024.
The Hong Kong Securities and Futures Commission (SFC) amended its rules on April 7 to allow entities, including centralized exchanges, to provide crypto staking services, aiming to position Hong Kong as a leading city in the Web3 space.
When announcing this rule change, the SFC stated, "We recognize the potential benefits of staking in enhancing blockchain network security and allowing investors to earn returns."
Staking involves locking cryptocurrency tokens on a blockchain network to support the operation and security of the network. In return, participants typically receive rewards in the form of additional cryptocurrency.
On April 10, Bosera HashKey became the first staking service provider approved under the new rules. According to a press release, staking will enable Bosera HashKey's Ethereum ETF to benefit from compound growth, as the earnings from staked Ethereum can be reinvested into the financial instrument.
According to Coinbase data, Ethereum stakers currently earn an average annual return of about 2.14%.
Hong Kong Amends Rules to Become a Web3 Hub
The issue of staking for Ethereum ETFs has been a focal point of discussion in the United States. In December 2024, Bernstein Research predicted that under a crypto-friendly Trump administration, staking would be approved for Ethereum ETFs. Since then, CBOE and the New York Stock Exchange (NYSE) have applied to the U.S. Securities and Exchange Commission (SEC) for rule changes to allow staking in such funds.
Asset management company BlackRock stated that while Ethereum ETFs have been successful, their performance is not perfect without staking. Staking is seen as a way to attract more investors to Ethereum ETFs, as investors may be drawn by the potential for returns, leading to further growth.
The Hong Kong Securities and Futures Commission (SFC) has clearly recognized this and is taking action accordingly. Chen Wu, CEO of Hong Kong cryptocurrency exchange Ex.io, stated in an interview with Cointelegraph, "The SFC's announcement means more opportunities are opening up—not just for staking, but also for more Web3 products to emerge within a regulated and trusted framework."
Since 2022, Hong Kong's blockchain industry has grown by 250%, and it is expected that by 2032, Hong Kong's fintech market will exceed $600 billion. The Hong Kong government is considered to have a positive cryptocurrency policy, contrasting sharply with the adversarial stance taken by some other governments towards this emerging asset class.
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