The Hong Kong Securities and Futures Commission (SFC) has taken a bold step forward in positioning the city as a leading global hub for digital assets. On February 7, 2025, the SFC officially announced that licensed virtual asset trading platforms (VATPs) may now offer staking services to clients. Additionally, crypto-focused exchange-traded funds (ETFs) are now permitted to participate in staking activities through approved channels.
This landmark decision reflects Hong Kong’s proactive regulatory approach amid intensifying global competition in the emerging field of crypto finance. By embracing innovation while maintaining investor protection, the SFC aims to strengthen the city's status as an international center for virtual asset management.
Regulatory Clarity for Staking Services
The SFC released two official circulars outlining clear guidelines for both VATPs and ETFs engaging in staking. These documents provide much-needed regulatory certainty, enabling market participants to plan and scale their offerings with confidence.
Staking—where users lock up cryptocurrencies to support blockchain network operations and earn rewards—has long been in demand by investors seeking yield-generating opportunities. Recognizing this, the SFC emphasized the role of staking in enhancing blockchain security and acknowledged growing investor interest.
To ensure responsible implementation, the SFC requires all platforms and funds intending to offer or engage in staking to obtain prior approval. They must also establish robust control mechanisms covering:
- Prevention of operational errors
- Protection of client assets
- Transparent disclosure of risks associated with staking
These safeguards are designed to maintain market integrity and protect retail and institutional investors alike.
Crypto ETFs Gain Access to Staking Rewards
One of the most significant aspects of the new framework is the inclusion of crypto ETFs. For the first time, these investment vehicles can now earn staking rewards on their underlying holdings—subject to strict conditions.
ETFs must conduct staking only through licensed VATPs or authorized intermediaries. Furthermore, they are required to adhere to liquidity risk limits, ensuring that asset availability is not compromised during market volatility.
This move aligns with broader efforts under Hong Kong’s ASPIRe roadmap, unveiled in February 2025, which outlines 12 key initiatives to foster innovation in the virtual asset sector. Among them: expanding product eligibility to include staking, margin financing, and derivatives trading.
By allowing ETFs to generate additional returns via staking, Hong Kong enhances the attractiveness of its crypto investment products compared to other jurisdictions with more restrictive policies.
Building a Sustainable Virtual Asset Ecosystem
Since launching its VATP licensing regime in June 2023, Hong Kong has consistently signaled openness to responsible innovation in fintech and digital assets. The latest policy update reinforces this commitment.
The timing is strategic. As global regulatory attitudes shift—particularly with renewed pro-crypto sentiment in major economies—Hong Kong is accelerating its efforts to become a first-mover in Asia.
SFC Chief Executive Officer Mrs. Julia Leung stated:
“Expanding the range of regulated services and products is crucial for sustaining the healthy development of Hong Kong’s virtual asset ecosystem. But it must be done within a regulated environment where client asset safety remains the cornerstone of compliance.”
This balanced approach—encouraging innovation without compromising oversight—sets Hong Kong apart from less regulated markets and more conservative financial centers.
What This Means for Investors and Platforms
For investors, the ability to access staking through regulated platforms means greater security, transparency, and recourse in case of disputes. No longer do they need to rely solely on offshore or unlicensed entities offering opaque yield schemes.
Licensed VATPs now have a green light to diversify revenue streams by introducing staking-as-a-service models. This could lead to increased platform engagement, longer user retention, and new competitive differentiation.
Moreover, integrating staking into ETF structures may boost fund performance over time, making them more appealing to yield-seeking investors who previously turned to decentralized finance (DeFi) protocols.
👉 Learn how compliant staking platforms are reshaping the future of digital wealth creation.
Frequently Asked Questions (FAQ)
Q: What is crypto staking?
A: Crypto staking involves locking up digital assets to support a blockchain network’s operations—such as validating transactions—and earning rewards in return. It's commonly used in proof-of-stake (PoS) networks like Ethereum.
Q: Are staked assets safe under Hong Kong regulation?
A: Yes. The SFC mandates that licensed platforms implement strong custody solutions, risk disclosures, and operational safeguards to protect client holdings involved in staking.
Q: Can any crypto exchange offer staking now?
A: No. Only SFC-licensed virtual asset trading platforms that receive prior approval and meet stringent controls can provide staking services.
Q: How will this affect crypto ETF performance?
A: Allowing ETFs to earn staking rewards can enhance their net returns, potentially increasing investor demand and improving fund competitiveness.
Q: Is this a sign of broader crypto adoption in Hong Kong?
A: Absolutely. Combined with earlier moves like launching spot Bitcoin and Ethereum ETFs, this signals Hong Kong’s intent to become a full-service digital asset hub.
Q: Will retail investors benefit directly?
A: Yes. Retail clients will gain access to regulated, transparent staking options with proper legal recourse—reducing reliance on risky offshore platforms.
The Road Ahead: Innovation Within Guardrails
Hong Kong’s latest move demonstrates a clear vision: foster innovation while upholding financial stability and consumer protection. Unlike jurisdictions that either ban or loosely regulate crypto activities, Hong Kong is crafting a middle path—one that invites global capital while minimizing systemic risk.
As part of the ASPIRe initiative, further developments are expected in areas such as over-the-counter (OTC) trading frameworks, custodial standards, and derivative products. The inclusion of staking is just one piece of a larger puzzle aimed at building a mature, resilient digital asset market.
With these progressive yet cautious steps, Hong Kong is not only keeping pace with global trends but actively shaping them.
👉 See how top-tier platforms are preparing for the next wave of regulated crypto growth in Asia.
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By aligning regulatory clarity with market demand, Hong Kong continues its ascent as a trusted gateway for institutional and retail investors navigating the future of finance.