BNY Mellon, the US systemically important bank, announced a partnership with Abu Dhabi-based Finstreet and the ADI Foundation to provide regulated Bitcoin and Ethereum custody services to institutional clients in the UAE through the Abu Dhabi Global Market (ADGM). The move marks the first time a major US custodian has formally entered the emirate’s digital asset infrastructure, signaling institutional appetite for regulated on-chain infrastructure in the Gulf region.
US Bank Expands Into Gulf Custody Infrastructure
BNY Mellon claims to be the first US global systemically important bank offering digital asset custody to institutional clients. The partnership leverages Finstreet, a subsidiary of Sirius International Holding (backed by UAE conglomerate IHC), as the local distributor and operational partner. The ADI Foundation provides blockchain infrastructure through ADI Chain, an institutional layer-2 blockchain that underpins the UAE’s emerging stablecoin ecosystem. Initial services focus on Bitcoin and Ethereum custody. The bank signaled plans to expand into stablecoins, tokenized real-world assets, and regulated digital instruments, though no timeline was provided.
UAE Regulatory Momentum Accelerates Custody Demand
The ADGM, an international financial center within Abu Dhabi’s free zone, has become a regulatory hub for digital assets in the Middle East. The UAE has licensed major custodians including BitGo and Binance, and introduced frameworks for tokenized stocks, ETFs, and crypto derivatives. In May 2026, the same day as the BNY announcement, Finstreet and the ADI Foundation unveiled a conversion rail connecting AE Coin (UAE dirham-pegged stablecoin) and USDU (US dollar-backed stablecoin). This infrastructure layer—operated on ADI Chain and regulated by the UAE central bank—creates demand for institutional custody of both native stablecoins and traditional digital assets.
ADI Chain Attracts Tier-One Financial Institutions
ADI Chain has signed memoranda of understanding with BlackRock, Mastercard, and Franklin Templeton in 2025, positioning it as a credible institutional blockchain for tokenized assets and cross-border settlement. These partnerships validate the infrastructure’s potential and reduce execution risk for custody providers entering the market. BNY’s entry suggests confidence that UAE regulatory frameworks and institutional demand justify localized operations, not just remote service provision. The stablecoin infrastructure—anchored by IHC-backed DDSC (dirham-backed stablecoin)—creates a closed-loop ecosystem for institutional clients seeking Gulf-denominated digital assets with custody guarantees.
Next Phase: Stablecoins and Real-World Asset Tokenization
BNY has committed to expanding beyond Bitcoin and Ethereum to include stablecoins and tokenized real-world assets, but no specific timeline or product roadmap was disclosed. The partnership’s success depends on regulatory approval for expanded asset classes and institutional adoption among Finstreet’s client base. Market reaction and adoption metrics have not been reported. The announcement positions BNY as the custody backbone for a broader UAE institutional digital asset ecosystem that extends beyond crypto trading into settlement infrastructure.
