ARP Digital said it is “the first and only central bank-licensed OTC service provider specialising in digital asset structured products”.
- ARP Digital holds a Category 3 license from the Central Bank of Bahrain.
- This marks the only licensed over-the-counter (OTC) service provider in the country that specializes in digital asset structured products.
- Since the U.S. Securities and Exchange Commission approved a spot Bitcoin ETF earlier this year, institutional investor demand for structured products has “grown significantly.”
ARP Digital, a digital asset services company co-founded by a former Goldman Sachs partner, has obtained a license from the Central Bank of Bahrain to operate in the Middle Eastern country, providing services including cryptocurrency trading, custody and portfolio management to its clients.
ARP Digital said it received a Category 3 license over the weekend and is the only over-the-counter (OTC) service provider focused on structured products regulated by the Central Bank of Bahrain. Structured products are very popular instruments in the traditional financial world, usually for investors who need customized investment products, often including derivatives and other complex financial structures.
The Middle East and North Africa (MENA)-based company said its products meet the complex needs of high net worth, accredited institutional and family office investors around the world. ARP Digital will serve both traditional financial and crypto-native investors.
“The firm designs both off-the-shelf and custom investment solutions to ensure they can accommodate the wide range of market views expressed by clients,” the firm said in a press release. “In addition, ARP Digital aims to be inclusive to a wider range of clients by offering multiple delivery and settlement options, such as cash or physically settled OTC products, bankable structured notes and fund products.”
The management team includes co-founder Yusuf Alireza, who worked at Goldman Sachs for 20 years and was the first Arab partner in the history of the Wall Street firm, according to his resume on ARP Digital's website. Other co-founders Abdulla Kanoo and Abdulaziz Kanoo were previously regional directors of Amber Group's cryptocurrency trading company business in the Middle East and North Africa.
The structured products industry in the digital asset market has not gained market share as much as traditional finance. However, Abdulla Kanoo of ARP Digital told CoinDesk that there appears to be increasing demand for such financial products from sophisticated investors, especially after the approval of a spot bitcoin (BTC) exchange-traded fund (ETF).
“We did see a big spike in demand for our distribution after the ETF was approved,” Kanu said. “We actually saw a lot of demand from global companies who wanted to get it on the institutional side.”
Bahrain has quickly become a cryptocurrency hub in the MENA region thanks to its well-regulated ecosystem for both local and foreign digital asset companies.
“The region stands to benefit from the growth and adoption of digital assets and has become a global hub,” Alireza said in an email.
He added: “There has not been a technological development of this magnitude (digital assets) in the financial services sector in the past two decades. MENA leadership sees the potential and is poised to become a global powerhouse.”