Coinbase wins Abu Dhabi license to arrange and custody tokenized securities

Coinbase is making Abu Dhabi a key base for its global expansion into tokenized securities after receiving regulatory approval from the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM).

Announced on Aug. 11, the authorization allows the U.S.-based crypto exchange to arrange deals in investments and provide custody services, giving Coinbase a regulated foundation for its international tokenization hub.

The move places Coinbase tokenization hub plans inside one of the Gulf’s established financial centers as banks, asset managers and blockchain companies increasingly explore the digitization of traditional financial assets.

Coinbase tokenization hub expands into regulated securities

The new Coinbase tokenization hub is designed to support securities represented on blockchain networks while remaining connected to underlying traditional assets.

According to Coinbase, securities issued through the ADGM framework will be backed by the corresponding shares and overseen by the FSRA.

For investors, the structure could reduce some of the traditional infrastructure required to gain exposure to digital representations of securities.

Coinbase says users will be able to hold the assets in digital wallets, although the products remain subject to regulatory requirements, including sanctions screening.

Tokenized securities are not simply cryptocurrencies carrying the name or price of a stock. They are blockchain-based representations linked to underlying financial assets and operate within a regulated legal and financial framework.

Coinbase’s move therefore represents a broader push beyond conventional cryptocurrency trading. The exchange has increasingly positioned itself as a platform where users can access multiple categories of financial products, including crypto assets and equities.

Coinbase Institutional Co-CEO Brett Tejpaul highlighted the regulatory significance of Abu Dhabi’s approach.

“No major financial center has yet built a framework that treats tokenized equities simultaneously as securities, blockchain-native tokens, and DeFi-composable assets.” Brett Tejpaul, Co-CEO of Coinbase Institutional.

Project Diamond gives Coinbase a head start

The Coinbase tokenization hub does not represent the exchange’s first experiment with blockchain-based financial instruments in Abu Dhabi. Its plans build on Project Diamond, a platform developed for institutional tokenization and initially focused on digital debt instruments.

Project Diamond previously received in-principle regulatory approval from ADGM and was used to issue a short-term discount note denominated in USDC on Coinbase’s Base blockchain.

Coinbase subsequently expanded the technology behind the project. Its infrastructure includes institutional custody, on-chain wallets and USDC settlement.

The latest regulatory permission broadens that strategy. Rather than concentrating solely on tokenized debt, Coinbase now has a regulatory basis to arrange investment transactions and provide custody connected to a planned securities business.

The company has also been developing tokenized equity products elsewhere. In June, Coinbase launched digital products linked to companies including SpaceX, Nvidia, Google, Strategy and Bitmine, presenting them as part of its wider effort to bring traditional financial markets onto blockchain rails.

Abu Dhabi competes for the tokenization market

Coinbase’s decision comes as Abu Dhabi strengthens its position as a regional center for digital assets and blockchain-based capital markets.

ADGM established its virtual-asset regulatory framework in 2018, giving it an early position among financial jurisdictions seeking to create formal rules for digital-asset businesses.

Coinbase has pointed to that regulatory history as a major factor in selecting Abu Dhabi for its international tokenization operations.

Other companies have also entered the market. Ondo Finance received approval in March to offer tokenized U.S. stocks and exchange-traded funds within ADGM, with its products admitted for trading through an FSRA-regulated Multilateral Trading Facility.

ADGM Chief Market Development Officer Arvind Ramamurthy said the regulator views tokenization as an emerging component of financial-market infrastructure.

Coinbase tokenization hub targets a growing GCC opportunity

The commercial opportunity behind the Coinbase tokenization hub extends beyond Abu Dhabi.

Research from Kearney and tokenization infrastructure firm Ctrl Alt estimates that nearly $500 billion in addressable value could be unlocked across the Gulf Cooperation Council through real-world asset tokenization by 2030.

The research identifies private markets and public equities among the areas with significant tokenization potential. Bank deposits, investment funds, real estate and commodities could also contribute to the regional market as financial institutions adopt blockchain-based infrastructure.

If traditional financial assets increasingly migrate onto public or permissioned blockchain networks, exchanges, custodians, infrastructure providers and blockchain networks could compete for a growing share of financial activity.

Coinbase is also dividing its UAE strategy between two locations. Abu Dhabi will serve as the center for tokenized securities and on-chain capital markets, while Dubai is being developed as the company’s global base for derivatives.

The key question for investors now is execution. Regulatory approval establishes the framework, but adoption will depend on the securities Coinbase ultimately launches, the institutions that use the infrastructure, liquidity, investor access and how effectively tokenized assets can interact with existing financial markets.

Abu Dhabi’s regulatory environment gives Coinbase a foundation from which to pursue that strategy. Whether the Coinbase tokenization hub becomes a major gateway between traditional finance and blockchain markets will depend on how quickly the promised infrastructure translates into widely used products.