Coinbase establishes global tokenized asset hub in Abu Dhabi

Coinbase is establishing its international tokenization hub in Abu Dhabi, marking a significant step in bringing traditional securities onto the blockchain outside the United States. The crypto exchange announced on Tuesday that it has received Financial Services Permission from the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM). This license allows Coinbase to arrange investment deals and provide custody for tokenized securities.

The exchange intends to leverage this approval to offer digital securities backed by underlying shares, which will be registered and issued within the ADGM framework under FSRA oversight. This move aligns with the growing trend of tokenization in traditional finance, where asset managers and banks are increasingly exploring blockchain technology to enhance the transferability, settlement speed, and collateralization of securities.

Abu Dhabi has actively positioned itself as a testbed for tokenization, having introduced a regulatory framework for virtual assets in 2018. This environment has attracted numerous crypto and tokenization firms seeking a regulated operational base. Brett Tejpaul, co-CEO of Coinbase Institutional, highlighted the unique approach of ADGM in treating tokenized equities simultaneously as securities, blockchain-native tokens, and DeFi-composable assets.

Coinbase already has a presence in the UAE, having initiated Project Diamond in 2023 through its asset management arm to facilitate the issuance and trading of digital debt instruments on Base, Coinbase's Ethereum-based blockchain network. Furthermore, Mubadala Capital, the asset management arm of Abu Dhabi's sovereign wealth fund, recently tokenized one of its private-market investment strategies using UAE-based provider KAIO on the Base blockchain, with Coinbase itself gaining exposure to the fund. The new Abu Dhabi operation will complement Coinbase's existing derivatives business in Dubai, strengthening its footprint in the UAE for expanding businesses beyond the U.S.