ABU DHABI (ALETIHAD)
Zodia Custody has received regulatory approval to provide custody services for digital securities at ADGM, according to a statement from the company.
The Financial Services Regulatory Authority (FSRA) approved an expansion of the existing Financial Services Permission held by Zodia Custody’s regional subsidiary, Tungsten Custody Solutions Limited.
The expanded licence allows the company to safeguard digital versions of traditional securities for institutional clients in ADGM. These can include tokenised investment funds, equities, fixed-income securities and commodities.
Tokenisation involves creating digital representations of conventional financial assets that can be held and transferred through blockchain-based systems.
Zodia Custody said it would initially focus on tokenised money-market products as financial institutions increasingly use tokenised funds alongside stablecoins for cash management and collateral.
“This is a fantastic opportunity for the franchise to support the growing demand for tokenised funds in the region,” said Phil Langton, Senior Executive Officer of Tungsten Custody Solutions.
“We are seeing increased interest in bringing more traditional equities and fixed-income assets on-chain,” he added.
The statement said tokenised real-world assets were expected to reach $16 trillion by 2030, while tokenised equities were forecast to reach $750 billion by the end of 2028.
As banks and asset managers bring more traditional securities on-chain, they will require regulated custodians authorised to hold those assets, the company said.
Richard Clark, CEO of Zodia Custody, said financial institutions needed custodians that could safeguard tokenised holdings to the standards expected by regulators, clients and company boards.
“This approval means we can offer bank-grade custody for tokenised securities as well as tokenised commodities in ADGM, and we expect demand for both to grow across the region,” Clark said.
The approval expands the range of assets Zodia Custody can hold for clients in ADGM. The company also operates through entities with regulatory permissions or registrations across Europe and the Asia-Pacific region.
Zodia Custody’s shareholders include Standard Chartered, in association with Northern Trust, SBI Holdings, Emirates NBD and National Australia Bank, the statement said.