Abu Dhabi's financial regulator granted initial approval for the creation of Arabian Bourse, which aims to be a fully-regulated crypto asset exchange and custodian in the emirate. The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market approved in principle the set up of Arabian Bourse at ADGM to operate a full-fledged crypto asset exchange and digital custodian, the company said in a statement on Monday. Arabian Bourse is a joint venture between digital business solutions provider GMEX Group and regional exchanges founder Arshad Khan. “The last few years have seen remarkable growth in the largely unregulated digital-assets market. ABX will address this issue by offering a fully regulated, robust and transparent eco-system," Mr Khan, co-founder and chief executive of Arabian Bourse, said. The regulator's nod comes after Digital Asset Kiosk Machine started operating last month in Abu Dhabi Global Market – the emirate’s financial free zone – allowing users to insert cash or credit cards in exchange for Bitcoin or other currencies given as a paper receipt for their records. Digital Asset Kiosk Machine is the first venture approved to offer such services. Arabian Bourse said it aims to become the preferred venue for crypto assets listing, trading and settlement with associated digital custody, depository and data services. It chose Abu Dhabi as a base to "benefit from the enlightened crypto asset regulatory framework", rapidly growing crypto asset industry in the region, concentration of global financial institutions and a trusted regulatory regime, the company said. "Bringing together crypto asset holders, blockchain technology opportunities and related strategic investments, the Arabian Bourse ecosystem will ultimately act as a bridge, aggregating Middle East and Northern Africa (MENA) digital assets activity with other major digital asset centres around the world," it said. The company said it is waiting to obtain the final licences to launch the digital exchange and custodian but did not provide a timeline. The dramatic growth of digital asset and crypto asset markets has disrupted and, in some segments, transformed the financial services industry. Crypto assets such as Bitcoin have evolved to become alternative investments for investors seeking returns in this asset class, and as such have required new regulatory frameworks globally. GCC financial centres have responded with new rules to regulate the fast-growing investment area, attract more companies operating in the digital currency industry, and encourage innovation in this space. In February ADGM launched a framework to regulate spot crypto asset activities, a step towards developing a safer marketplace for digital currencies.