Key facts
- Coinbase has established an international tokenization hub in Abu Dhabi.
- The hub secured Financial Services Permission from the Abu Dhabi Global Market's regulator.
- Coinbase plans to issue and register digital securities backed by underlying shares.
- These tokens will be treated as securities, blockchain-native tokens, and DeFi-composable assets.
- The Abu Dhabi operation will complement Coinbase's derivatives business in Dubai.
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 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. The new Abu Dhabi operation will complement Coinbase's existing derivatives business in Dubai, strengthening its footprint in the UAE for expanding businesses outside the U.S.