BNY announced an expansion of its digital asset custody business into Abu Dhabi through a strategic collaboration with Finstreet Limited and ADI Foundation, marking one of the largest traditional financial institutions to deepen regulated crypto operations in the United Arab Emirates.
The initiative will operate through Abu Dhabi Global Market (ADGM), the UAE’s international financial center, and initially focus on institutional custody services for Bitcoin and Ethereum before later expanding into stablecoins, tokenized assets, and other regulated digital financial instruments.
Under the agreement, Finstreet, a digital market infrastructure company backed by Abu Dhabi-based conglomerate IHC, and ADI Foundation, a sovereign-grade blockchain infrastructure organization, will provide localized digital infrastructure and blockchain rails supporting BNY’s custody platform.
BNY said the collaboration is intended to create a regulated, scalable, and institutionally compliant custody framework for digital assets within the UAE. The bank currently oversees approximately $59.4 trillion in assets under custody and administration globally, making it the world’s largest custodian bank.
The expansion reflects accelerating institutional demand for regulated crypto custody infrastructure in the Middle East, where regulators have increasingly positioned the region as a global center for blockchain finance, tokenization, and digital asset settlement systems.
Abu Dhabi Emerges as Institutional Crypto Hub
BNY’s move reinforces Abu Dhabi’s growing status as one of the leading jurisdictions for institutional digital asset activity. ADGM has spent recent years building a regulatory framework designed to attract banks, exchanges, tokenization firms, and blockchain infrastructure providers seeking clearer compliance standards than those available in several Western markets.
The collaboration also aligns with broader UAE policy initiatives aimed at transforming the country into a regional hub for financial technology and blockchain infrastructure. Analysts noted that Gulf jurisdictions have increasingly attracted major global financial institutions due to their faster regulatory implementation, digital asset licensing frameworks, and sovereign-backed infrastructure initiatives.
According to BNY Executive Vice President Hani Kablawi, the UAE is entering a new stage of financial development as traditional finance and blockchain infrastructure converge.
The initiative will initially focus on institutional-grade custody for Bitcoin and Ether, though the firms said future phases could include stablecoins, tokenized real-world assets, and blockchain-native settlement systems integrated into ADI Foundation’s underlying infrastructure.
Industry analysts said the expansion highlights how major custody providers are increasingly positioning digital assets as an extension of traditional capital markets infrastructure rather than a separate speculative sector.
Institutional Crypto Infrastructure Competition Intensifies
BNY has steadily expanded its digital asset operations over recent years, becoming the first U.S. global systemically important bank to launch regulated digital asset custody services. The bank has increasingly integrated blockchain infrastructure into broader custody, payments, collateral, and settlement systems.
The Abu Dhabi expansion arrives amid intensifying competition among traditional financial institutions seeking leadership positions in institutional crypto custody and tokenized finance infrastructure. Firms including JPMorgan, State Street, Citi, Fidelity, and Coinbase have all expanded digital asset custody capabilities over the past two years as institutional adoption accelerates globally.
Institutional demand for regulated custody solutions has grown significantly following the approval of spot Bitcoin ETFs and the expansion of tokenized financial products across global markets. Analysts increasingly view custody infrastructure as one of the foundational components required for broader institutional participation in digital assets.
The expansion also comes as tokenization activity accelerates across the Gulf region. Abu Dhabi and Dubai have both launched initiatives tied to tokenized bonds, digital securities, blockchain-based settlement systems, and stablecoin infrastructure aimed at attracting global capital flows.
Market participants said BNY’s entry into Abu Dhabi’s regulated digital asset ecosystem could further legitimize the region’s position as a global crypto finance hub while increasing pressure on U.S. regulators to finalize clearer federal frameworks governing digital asset custody and tokenized financial markets.
