Coinbase is expanding its tokenization business into Abu Dhabi after receiving a Financial Services Permission (FSP) from the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM).
In an announcement on August 11, Coinbase said the permission allows its ADGM entity to arrange deals in investments and provide custody. The company plans to use the regulated operation as a hub for its international tokenization activities.
The move gives Coinbase a regulated base in the UAE from which it can develop services involving tokenized securities, including blockchain-based representations of traditional financial assets. The company has not said that the license itself constitutes authorization to offer every type of tokenized security or product it may develop in the future.
What the Abu Dhabi License Allows
Coinbase said the FSP covers arranging deals in investments and providing custody. The company plans to use those permissions to support the development and distribution of tokenized securities within ADGM’s regulatory framework.
According to Coinbase, tokenized securities issued through the ADGM operation would be backed by the underlying assets and subject to applicable regulatory requirements. The company said verified token holders would receive shareholder rights associated with the relevant securities, including dividends and voting rights where applicable.
Coinbase also said its proposed tokenized securities infrastructure will include compliance controls such as sanctions screening. The company said it will retain the ability to freeze or seize assets at the wallet level where required by law or regulation.
The precise rights attached to individual tokenized securities will depend on the terms and documentation of each instrument. Coinbase’s disclosures state that certain rights can be subject to vesting conditions, while some redemption processes may require access to conventional banking or brokerage infrastructure. As a result, the tokenization model does not eliminate traditional financial infrastructure altogether. Instead, it combines blockchain-based ownership and transfer mechanisms with regulated custody, compliance, and other financial-services processes.
Why Abu Dhabi
ADGM’s regulatory framework is an important part of Coinbase’s decision to establish the hub in Abu Dhabi. The financial center operates under a common-law framework and has developed a regulatory regime covering virtual assets and financial services. The FSRA has also taken steps to establish a framework for tokenized securities.
Coinbase executives have highlighted ADGM’s treatment of tokenized securities as regulated financial instruments. Brett Tejpaul, co-CEO of Coinbase Institutional, said the framework provides a basis for treating tokenized equities as securities while allowing them to use blockchain-based infrastructure.
Those comments represent Coinbase’s assessment of the jurisdiction and its business strategy rather than an independent assessment of ADGM’s position. ADGM has nevertheless been developing its tokenization framework. In June, the FSRA approved the first admission of tokenized securities, structured as certificates over shares, to ADGM’s official list.
Coinbase Expands Its UAE Operations
The tokenization hub is part of a broader expansion by Coinbase in the UAE. The company said it is developing two major operations in the region: the tokenized-securities and on-chain capital-markets hub in Abu Dhabi and a derivatives hub in Dubai.
The expansion comes as Coinbase broadens its product offering across several international markets. On August 11, the exchange also announced plans to provide eligible UK professional investors with access to more than 170 derivatives contracts, including perpetuals, dated futures and crypto options.
Coinbase has separately expanded its UK stock-trading offering, giving users access to thousands of U.S. equities. The international expansion allows Coinbase to pursue different financial products under the regulatory frameworks of individual jurisdictions, while its U.S. business continues to operate within the country’s separate regulatory environment.
Tokenization Push Comes as Regulation Develops
Coinbase’s Abu Dhabi move comes as financial institutions and crypto companies continue developing blockchain-based versions of traditional financial assets.
Tokenized securities can represent ownership or economic interests in assets such as equities and bonds on blockchain networks. Supporters argue that the technology could improve settlement and broaden access to financial markets, while regulators continue to address issues including investor protection, custody, market integrity and compliance.
The regulatory treatment of these products varies across jurisdictions. ADGM’s decision to bring tokenized securities within its existing securities framework provides Coinbase with a defined regulatory environment in which to develop its offering.
The practical scale of the business will depend on the securities Coinbase ultimately launches, regulatory approvals and requirements applicable to individual products, as well as demand from investors and financial institutions. The move also adds to the UAE’s growing role in Coinbase’s international strategy, alongside the company’s planned derivatives operation in Dubai.
For now, the significance of the authorization is primarily regulatory and strategic. The longer-term impact will depend on the tokenized securities Coinbase launches, their regulatory treatment, and whether investors and financial institutions adopt the products at meaningful scale.
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