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Big News from the Crypto World

The biggest custodian bank in the world, BNY Mellon, is stepping into digital assets. They plan to offer digital asset custodyin Abu Dhabi. This move comes through a partnership with Finstreet and the ADI Foundation. It could open new doors for Bitcoin, Ether, and more in the Middle East.

Abu Dhabi is fast becoming a top spot for crypto and blockchain. With clear rules and big money from royal families, it draws global players. BNY’s entry shows how traditional finance mixes with crypto.

What is BNY Mellon and Why Does This Matter?

BNY Mellon manages trillions in assets. They hold and protect investments for big banks and funds. Now, they want to do the same for crypto in the Abu Dhabi Global Market (ADGM).

Custody means safely storing digital assets like Bitcoin and Ether. It protects from hacks and ensures owners can prove they own them. For institutions, trusted custody is key to enter crypto without big risks.

This launch targets clients of Finstreet. Finstreet runs a trading platform and clearing house. It is part of IHC, a huge company owned by Abu Dhabi’s royal family. IHC invests in many sectors, including tech and finance.

The Partners: Finstreet and ADI Foundation

Finstreet makes trading digital assets easy and safe. As a subsidiary of IHC, it has strong backing. The ADI Foundation supports the ADI blockchain, a layer-2 network built for speed and low costs.

ADI was created by Sirius International, another IHC arm. Layer-2 blockchains build on top of main ones like Ethereum. They handle more trades faster and cheaper. ADI aims at big institutions with strong security.

Ajay Bhatia from ADI Foundation said: “ADI’s institutional-grade digital infrastructure will unlock new opportunities in custody, trade finance, and lending from Abu Dhabi to the world.” This hints at big plans beyond just storage.

Details of the

Plan

The deal needs final contracts and okay from regulators. At first, BNY will custody Bitcoin and Ether bought by Finstreet users. Later, it expands to:

• Stablecoins like USDT or new local ones.
• Tokenized real-world assets (RWAs), such as property or bonds on blockchain.
• Native tokens on the ADI blockchain.

This step-by-step approach reduces risks. It lets BNY test waters before full dive.

ADI Blockchain: Fresh and Ambitious

ADI went live just last December. It is new but backed by deep pockets. The top project so far is DDSC, a stablecoin regulated by the central bank.

DDSC launched in February with First Abu Dhabi Bank as a partner. Stablecoins hold steady value, often tied to the US dollar. DDSC uses UAE Dirham. Its market cap is about 117 million Dirham, or $32 million.

Most of it – 94% – sits in one wallet from three weeks ago. This shows early use but room to grow. As more banks and firms join, DDSC could power payments and trades in the region.

Why Abu Dhabi for Crypto Custody?

Abu Dhabi leads UAE’s push into blockchain. ADGM offers friendly rules for crypto firms. No heavy taxes, fast approvals, and focus on innovation draw companies from Dubai and beyond.

The royal family’s IHC invests billions. This gives trust and cash. Pairing with BNY brings global name power. It signals to other banks: crypto is safe and ready for big money.

UAE wants to be a crypto hub like Singapore or Switzerland. Projects like DDSC show they build local tools, not just copy others.

What This Means for Investors and the Market

For crypto holders, BNY custody adds safety. Big players can now buy Bitcoin via Finstreet, store with BNY, and trade on ADI.

Tokenized RWAs could boom. Imagine owning a share of Dubai real estate as a token, custodied by BNY. Trade finance and lending get faster with blockchain.

Stablecoins like DDSC may grow fast. With bank partners and regulation, they beat wild ones. Market cap could hit billions as adoption rises.

Globally, this boosts institutional crypto. BNY’s move may push rivals like State Street or JPMorgan to speed up.

Challenges Ahead

Not all smooth. Regulators must approve. Crypto rules change fast. Hacks and market crashes test custodians.

ADI is young. It needs more users and apps. DDSC’s big wallet raises questions – is it real demand or test funds?

Still, backing from IHC and BNY lowers risks. Success here could spark copycats in Saudi or Qatar.

Looking Forward

BNY’s

in Abu Dhabi marks a milestone. It blends old finance with new tech. Watch for approvals and first custodies soon.

Abu Dhabi eyes world leadership in digital assets. With ADI, Finstreet, and BNY, they have tools. Investors: this could drive UAE crypto growth in 2024.

Stay tuned for updates on DDSC, RWAs, and more partnerships.

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Disclaimer: Blockmanity is a news portal and does not provide any financial advice. Blockmanity's role is to inform the cryptocurrency and blockchain community about what's going on in this space. Please do yourown due diligence before making any investment. Blockmanity won't be responsible for any loss of funds.

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