According to reports, the SFC has conversations about offering staking services through approved platforms with the nation’s cryptocurrency ETF issuers.

According to reports, the Securities and Futures Commission (SFC) of Hong Kong is thinking of allowing spot exchange-traded fund (ETF) issuers to stake Ether (ETH).

The financial authority in Hong Kong is considering allowing ETH ETF issuers in the nation to stake Ether $3,749 and generate passive income, according to a Bloomberg article. A Bitcoin BTC of $67,241 was approved in Hong Kong.

ETF early this year, following the US government’s approval of 10 spot ETFs by more than three months.

After receiving suggestions in recent weeks, the SFC had talks with the nation’s cryptocurrency ETF issuers regarding offering staking services via platforms that are licensed.

According to Bloomberg, the financial regulator is merely now debating the issue; no set date for implementation has been set.

The U.S. Securities and Exchange Commission (SEC) views staking services as an investment contract and a breach of securities laws; this stands in contrast to the SFC’s action.

The recent changes made by significant financial institutions in their applications for the spot ETH ETF made this clear. Fidelity, for instance, deleted staking from its most recent S1 file.

Proof-of-reserve token holders can lock their crypto tokens for a certain amount of time by using crypto staking as a service. Traders receive a percentage of the staked tokens as payment for staking cryptocurrency. Users can stake their tokens through a variety of third-party staking providers.

Staking services were deemed securities by the U.S. SEC last year, which prompted companies like Kraken to discontinue their staking operations within the country.

Coinbase, on the other hand, is opposing the SEC’s security stance on staking and released a “Petition for Rulemaking” on March 20. It argues that because core staking does not need a monetary commitment and does not have an opportunity cost associated with it, it is not a security.

In 2024, Hong Kong has become a burgeoning center for cryptocurrency service providers because of some pro-crypto laws.

It also made history by being the first nation to approve an ETH ETF on the spot before the US. However, since its launch last month, the response has been mediocre at best. The choice to permit staking may result in additional capital flowing into the nation’s exchange-traded funds.