Coinbase Sets Up International Tokenization Hub in Abu Dhabi

Coinbase has received a Financial Services Permission from the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM), the company said Tuesday. The license allows the crypto exchange to arrange investment deals and provide custody services for tokenized securities, giving it a regulated base for bringing traditional assets onto blockchain networks outside the United States.

The approval paves the way for Coinbase to issue and register digital securities backed by underlying shares within ADGM, with oversight from the FSRA. Brett Tejpaul, co-CEO of Coinbase Institutional, said no major financial center has yet built a framework that treats tokenized equities simultaneously as securities, blockchain-native tokens and DeFi-composable assets.

Tokenization places ownership claims on assets such as stocks, bonds, investment funds and private credit onto blockchain networks. The technology is being tested by financial institutions as a way to support trading outside traditional market hours, shorten settlement times and connect securities with blockchain-based applications. However, tokenized equities still face regulatory complications, as digital representations of shares remain subject to securities law even when traded on blockchain infrastructure. Issuers must align ownership rights, custody, investor protections and transfers with the technical features that allow tokens to interact with other blockchain apps.

ADGM introduced its virtual asset framework in 2018 and has become one of the Gulf region's main centers for crypto and blockchain-based finance. Coinbase already has ties to the emirate: its asset management arm launched Project Diamond in 2023, allowing institutional investors to issue and trade digital debt instruments on Base, Coinbase's Ethereum-based network. Last month, Mubadala Capital, Abu Dhabi's sovereign wealth fund asset manager, tokenized a private-market investment strategy through UAE infrastructure provider KAIO, with the product made available on networks including Base. Coinbase also took exposure to that fund.

The new authorization complements Coinbase's existing derivatives business in Dubai, giving the company two separate regulatory bases in the United Arab Emirates. It also reduces Coinbase's reliance on the U.S. for new product development, where securities rules make tokenized equities a complicated area for crypto firms. The next challenge is distribution: regulatory approval provides the infrastructure to issue and custody tokenized securities, but success will depend on whether institutions, asset managers and investors generate enough trading activity to create deep liquidity.