Abu Dhabi Global Market (ADGM) has taken another step toward integrating traditional financial markets with blockchain technology, following regulatory approval for Zodia Custody to safeguard tokenized securities through its local subsidiary.
On October 12, 2026, Zodia Custody announced that ADGM's Financial Services Regulatory Authority (FSRA) had approved a variation of the Financial Services Permission held by Tungsten Custody Solutions Limited, expanding its activities to include custody of digital securities.
The initial focus will be tokenized money-market instruments, with potential expansion into tokenized equities, fixed-income securities and commodities.
Unlike a new investment platform or exchange-traded product, however, the approval concerns the infrastructure used to hold financial assets securely, not their issuance or public distribution.
What Has ADGM Actually Approved?
The expanded permission allows Zodia's Abu Dhabi subsidiary to provide regulated custody for digital representations of conventional financial securities.
Tokenization involves recording ownership or other rights associated with financial assets through blockchain-based systems. These assets may represent interests in investment funds, bonds, shares or other traditional instruments.
Zodia's Expanded ADGM Permission
Sources: Zodia Custody announcement and ADGM FSRA Public Register.
Why Start With Tokenized Money Markets?
Money-market instruments are an important starting point because banks, asset managers and corporate treasury departments use short-term investments to manage liquidity and cash reserves.
Tokenized money-market funds aim to combine familiar investment structures with blockchain-based ownership records and potentially more efficient transfers and settlement.
For institutions already using stablecoins and digital assets, the ability to hold tokenized funds with a regulated custodian could make it easier to integrate traditional cash-management products into digital financial systems.
Zodia Chief Executive Richard Clark highlighted increasing institutional demand for holding tokenized funds alongside stablecoins for treasury management and collateral purposes.
The company also expects demand for digital custody to expand as conventional securities move onto blockchain-based infrastructure.
However, tokenization does not eliminate the underlying investment risks. Fund liquidity, credit exposure, settlement arrangements and legal ownership rights remain important considerations.
Who Can Actually Hold These Securities?
According to the ADGM FSRA Public Register, Tungsten Custody Solutions is expressly prohibited from dealing with retail clients.
This means the expanded custody service is aimed at eligible institutional and professional market participants rather than individual investors seeking to purchase tokenized shares or funds through a consumer trading application.
The approval also does not automatically authorize the public sale of tokenized securities. Issuers, exchanges, distributors and other intermediaries remain subject to applicable regulatory requirements.
Abu Dhabi's Growing Tokenization Infrastructure
Zodia's approval follows other developments supporting Abu Dhabi's position in digital capital markets.
In August 2026, Coinbase received FSRA permission to establish an international tokenization hub in ADGM, including permission to arrange investment transactions and provide custody services.
Together, these developments highlight the emergence of regulated infrastructure for bringing traditional financial assets onto blockchain networks.
The foundation is not entirely new. ADGM published guidance on the regulation of digital securities in 2019, addressing activities including issuance, trading, settlement and custody.
For asset managers and fund providers in the GCC, a broader network of regulated custodians could eventually support the development and distribution of tokenized investment products.
The significance of Zodia's approval is therefore institutional rather than retail: Abu Dhabi is expanding the financial infrastructure needed to hold tokenized securities, even as access to those services remains restricted.
