The bank, which oversees $59 trillion in assets under custody globally, will operate through Abu Dhabi Global Market (ADGM) under a Category 4 license from the free zone's Financial Services Regulatory Authority (FSRA). The license covers arranging custody, fund administration, fund accounting, and transfer agency services.

Initial custody offerings will cover Bitcoin and Ether, with plans to expand into stablecoins and tokenized real-world assets (RWAs) over time.

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Partnership Structure

BNY is entering the market through two partnerships with entities linked to IHC Group, one of the UAE's largest investment conglomerates. The first is Finstreet Limited, a digital market infrastructure firm with three ADGM-regulated subsidiaries covering the full financial asset lifecycle: origination, issuance, trading, settlement, and custody.

The second is ADI Foundation, which operates ADI Chain, described as MENA's first institutional Layer-2 blockchain. ADI Chain is built on ZKsync's Airbender zero-knowledge proof architecture and runs a UAE Central Bank-licensed dirham-backed stablecoin called DDSC. ADI Foundation's existing strategic partners include BlackRock, Franklin Templeton, Mastercard, Chainlink, and M-Pesa Africa, providing meaningful institutional credibility to the ecosystem BNY is joining.

Hani Kablawi, Executive Vice Chair at BNY, framed the move as a response to structural shifts in the region's financial sector. "The UAE is entering a new phase of financial development, characterized by deeper markets, greater digital sophistication and stronger global connectivity," he said. "BNY is uniquely positioned to connect traditional and digital financial ecosystems."

Arvind Ramamurthy, Chief of Market Development at ADGM, called the expansion a sign of BNY's deepening commitment to the market: "This significant milestone highlights BNY's commitment to expanding their operations within Abu Dhabi and the UAE."

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Why Abu Dhabi, Why Now

BNY first opened an Abu Dhabi office in 1998 and has maintained a UAE presence for more than 26 years. Its digital asset operations are a more recent development. The bank launched its U.S. crypto custody platform in October 2022 and has since added tokenized deposits (January 2026) and served as custody provider for proposed ETF structures, including a Morgan Stanley Bitcoin ETF structure (March 2026).

The ADGM context matters here. The free zone updated its virtual asset licensing framework in March 2026, effective January 1, to cover tokenized securities, fiat-referenced tokens, DeFi protocols, and AI-driven trading, while explicitly banning privacy coins such as Monero and Zcash from all regulated entities.

Binance received a Global License under the same framework earlier this year, becoming the first crypto exchange to do so, a signal of the regulator's ambition to attract top-tier institutional names.

ADGM's common-law framework is designed around SIFI-grade counterparties, distinguishing it from Dubai's competing VARA regime, which licenses a broader range of firms but with a different institutional focus.

The UAE's on-chain RWA market was valued at roughly $17 billion in 2025, with deal activity accelerating. DAMAC Group signed a $1 billion real estate tokenization deal with Mantra in January 2025, and KAIO, a Tether-backed RWA project in the UAE, closed an $8 million funding round as recently as April 2026.

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Regional Implications

For Gulf institutional investors, including sovereign wealth funds and family offices, BNY's ADGM license creates a regulated, SIFI-grade custody option for BTC and ETH positions. The availability of a SIFI-grade custody counterparty is significant for large institutions managing crypto allocations through locally registered vehicles, where counterparty risk management is a central consideration.

The South Asia angle is also relevant. The UAE is home to the largest Indian diaspora in the world, roughly 3.5 million nationals, and annual remittance flows between India and the UAE exceed $20 billion.

ADI Foundation has stated a goal of onboarding one billion users by 2030, with Asia and Africa as co-equal primary target markets.

A dirham-backed stablecoin running on ADI Chain, operating alongside BNY's custody infrastructure within the same regulatory ecosystem, could eventually support settlement use cases across that corridor, though regulatory alignment at the receiving end remains a separate challenge.

ADI Foundation's partnership with M-Pesa Africa is the clearest link to African markets. M-Pesa serves more than 60 million monthly users across eight African countries. BNY's custody layer could, over time, serve as an institutional settlement reference for African digital asset flows running through ADI Chain, particularly as regulators in Kenya and Ghana continue CBDC pilots.

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What Comes Next

BNY CEO Robin Vince has consistently framed the bank's digital asset strategy as a long-term play. Speaking generally about the bank's digital asset strategy in March 2026, Vince said: "This will be a 5, 10, 15 year journey," describing BNY as a bridge between traditional and digital finance. Those remarks were not made in specific reference to the Abu Dhabi expansion but reflect the broader strategic posture behind it.

The immediate question is how quickly BNY expands its ADGM product set beyond BTC and ETH. Finstreet's issuance and settlement infrastructure and ADI Chain's stablecoin and RWA focus both point toward the next phase of product development, consistent with BNY's stated roadmap of expanding into stablecoins and tokenized real-world assets.

For builders working within ADGM's regulatory perimeter, BNY's Category 4 license represents a compliant custody counterparty, though direct access requires ADGM entity registration.