The Cboe BZX exchange asked U.S. regulators for permission to add staking to Fidelity’s Ether ETF, according to a filing submitted on March 11. This step could allow investors to earn additional returns from their Ethereum (ETH) holdings.
Staking is a popular way for cryptocurrency holders to earn passive income. It involves locking up cryptocurrency tokens, like Ether, to support and secure the blockchain network. In return, participants earn rewards paid out in additional tokens. Currently, staking Ethereum offers investors around 3.3% annual returns.
The Fidelity Ethereum Fund (FETH) is already one of the largest Ether ETFs, managing nearly $1 billion in assets. By incorporating staking, Fidelity’s fund could attract even more investors by offering higher returns than simply holding Ethereum. The filing said Fidelity’s ETF would use trusted third-party staking providers to manage this process safely.
This proposal marks Cboe’s latest effort to incorporate staking into its cryptocurrency ETFs. In February, Cboe filed a similar request to allow staking in another popular Ether ETF—the 21Shares Core Ethereum ETF.
SEC Must Approve Before Staking Can Start
Before staking can begin, the U.S. Securities and Exchange Commission (SEC) must first approve Cboe’s proposal. The SEC oversees and regulates investment funds, including cryptocurrency ETFs. Recently, the agency has shown signs of greater openness toward crypto-related investment products.
The SEC acknowledged more than a dozen filings in February related to cryptocurrency ETFs, including proposals involving staking, trading options, and other new cryptocurrency fund types. The regulator has also dropped several high-profile cases against cryptocurrency exchanges, including Coinbase, Gemini, OpenSea and Kraken. This suggests the regulatory environment might be becoming more favorable for crypto investors, especially after President Donald Trump began his second presidential term on Jan. 20.
More Crypto-related Filings From Cboe
Besides staking, Cboe has also filed for permission to list ETFs involving other cryptocurrencies, like XRP. It recently applied to list a 21Shares XRP ETF, proposing classification as a Commodity-Based Trust. If approved, the XRP ETF would join existing spot Bitcoin (BTC) and Ethereum (ETH) ETFs, approved last year.
Additionally, Cboe BZX Exchange resubmitted applications on Jan. 28 for spot Solana ETFs on behalf of firms including Bitwise, VanEck, 21Shares, and Canary Capital. These applications followed the SEC’s rejection of earlier submissions last year. The filings restart the review process under acting SEC Chair Mark Uyeda.
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