Hong Kong Approves Latest Ethereum Staking ETF as New Rules Take Root

Over a week ago, Hong Kong’s Securities and Futures Commission (SFC) approved staking services in an effort to “rewrite the rules” of finance. Now, those efforts are starting to bear fruit.

The SFC’s approval has opened the way for China Asset Management (ChinaAMC) to launch a staking-enabled Ether ETF through a collaboration with OSL Digital Securities by May 15, according to a statement.

Institutional yield from fully-compliant platforms such as OSL comes as new favorable rules and Hong Kong’s desire to be a central digital assets hub for Asia begin to take shape.

Earlier this month, Bosera International and HashKey Capital Limited jointly launched their own fund with a staking provision. That ETF is expected to launch on April 25.

The collaboration between the pair transforms ChinaAMC’s Ether ETF from a passive investment product into an active participant in the Ethereum ecosystem, enabling investors to receive proof-of-stake rewards.

Such a convention “lowers the threshold to participating in Ethereum staking,” said Thomas Zhu, head of digital assets at ChinaAMC.

A closer look

The staking architecture leverages OSL’s status as the first insured and SFC-licensed digital asset platform in Hong Kong. It works with Kiln, a staking platform powering other chains such as Solana, Aptos, and Sui.

They sealed that partnership on April 10, with the aim of bringing Ethereum staking to market.

OSL provides custody services with cold storage and insurance coverage, while Kiln manages the validator nodes that perform consensus duties on the Ethereum network.

The technical implementation maintains a segregation of duties: Kiln manages validation while OSL controls the assets and reward distribution.

Staking rewards generated through this will accrue to the ETF and be incorporated into its net asset value, benefiting its shareholders, the statement reads.

Edited by Sebastian Sinclair