BNY expands digital custody to UAE via ADGM partners

BNY is launching digital asset custody services in the United Arab Emirates through partnerships with Finstreet and the ADI Foundation at Abu Dhabi Global Market. The offering will support tokenized assets and near-real-time on-chain settlement inside regulated channels.

The bank said the expansion combines its digital asset platform with local partners to provide institutional-grade custody for tokenized deposits, securities and cash-like instruments. The ADI Foundation, which focuses on sovereign digital economies, will participate in infrastructure designed for governments, large institutions and regulated market participants.

BNY plans to offer custody that lets tokenized securities and deposit-like tokens move on-chain while remaining within regulated frameworks. The bank described an example in which a tokenized treasury bond held in custody is transferred instantly to a client in Abu Dhabi for use as collateral, enabling on-chain settlement without removing the asset from compliant custody.

Hani Kablawi, executive vice chair at BNY, described the UAE as entering a new phase of financial development with deeper markets and greater digital sophistication. Dominic Longman, managing director for the Middle East and Africa at Zodia Custody, described the mood in the region as incredibly positive.

The UAE is developing its regulatory framework for digital assets and exploring state-backed initiatives. Local institutions, including International Holding Company and others, have announced plans for a regulated dirham-backed stablecoin intended for government and institutional use. BNY’s ADGM partnerships are intended to support tokenized real-world assets and stablecoins inside a sovereign-aligned framework.

BNY said custody is becoming the middleware that enables digital assets to be used for settlement, collateral and payments inside regulated markets. Industry attention has shifted from basic security of custody to how institutions integrate digital asset services into existing operations. BNY’s approach emphasizes local partnerships and regulatory alignment rather than a single global platform.

BNY, formerly BNY Mellon, manages roughly $59 trillion in assets under custody and administration. The bank’s entry into the UAE follows a broader trend of large custodians expanding crypto and tokenization services to meet demand from institutional clients seeking regulated custody and on-chain settlement rails.