- Cboe BZX filed a form 19b-4, requesting permission for 21Shares to allow staking within its Ethereum ETF.
- The issuer would utilize a point-and-click method that involves staking its ETH holdings without actually moving the tokens.
- Ethereum staking within ETFs could see approval, considering ongoing regulatory reforms in the digital asset landscape.
Ethereum (ETH) could be set for increased demand in the coming months following Cboe BZX 19b-4 filing with the Securities & Exchange Commission (SEC) to enable staking for the 21Shares Core Ethereum exchange-traded fund (ETF).
Cboe files for 21Shares Ethereum ETF to enable staking
In a 19b-4 filing, Cboe BZX Exchange proposed an amendment to permit staking for the 21Shares Core Ethereum ETF.
The filing, posted Wednesday, outlines the exchange's request to allow the trust to stake its Ethereum holdings. The proposal now awaits the SEC's acknowledgment before a 240-day window opens for whether or not to approve the filing.
"Based on discussions with the Sponsor, the Exchange proposes to amend several portions of the Eth ETP Amendment No. 2, as amended, to allow the staking of the Ethereum held by the Trust," the filing states.
Cboe BZX Exchange outlined that the Trust's Ethereum will remain under the Custodian's control during staking.
The sponsor will utilize "point-and-click staking," a process where staking is initiated through an interface without moving clients' Ethereum holdings.
The filing states that this approach "reduces the risk of loss of ether through theft at the node while the asset is staked."
Staking is the process of earning passive income on your digital assets by using them to contribute to the security of a cryptocurrency network.
US spot Ethereum ETFs began trading on July 23, attracting over $3 billion in net inflows in the past seven months, even without the inclusion of staking incentives for investors.
Under former Chair Gary Gensler, the SEC allegedly opposed staking within Ethereum ETFs, causing issuers to exclude the concept from their registration statements to prevent regulatory scrutiny.
Following President Donald Trump's election win in November, some pro-crypto officials began showing a desire for ETH products to begin staking.
SEC commissioner Hester Peirce shared earlier in December that she would like to see staking within Ethereum ETFs getting approval under a new administration in the agency.
The new SEC administration has begun laying out regulatory reforms for the crypto industry, including a new crypto task force headed by Peirce.
"The Task Force will also assist the staff and the Commission in considering requests to modify certain features of existing exchange-traded products, including to allow for staking and in-kind creations and redemptions," wrote Peirce in a statement on February 4.
If the SEC allows staking within Ethereum ETFs, it could boost their inflows and strengthen ETH's narrative as an "internet bond."
In its 2025 crypto outlook, banking firm Standard Chartered predicted that ETH could rally to $14,000 by year-end if the SEC quickly approves staking within these products.
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