Coinbase Abu Dhabi license opens new route for tokenized shares

Coinbase has secured a regulatory license in Abu Dhabi to build what it says will be an international hub for tokenized securities – a market where crypto-native infrastructure increasingly meets regulated capital markets.

The Financial Services Regulatory Authority of Abu Dhabi Global Market granted Coinbase Financial Services Permission to arrange investment deals and hold custody for securities that are registered and issued on blockchain networks. The products themselves will be backed by underlying shares, the company said, and supervised by the FSRA under ADGM's existing virtual-asset rules.

Holders of the tokenized securities will receive economic rights tied to the underlying assets. Certain shareholder rights, including the ability to vote, depend on vesting conditions attached to each digital security, Coinbase said.

Investors will be able to hold the products in a digital wallet without opening a traditional brokerage account or setting up a correspondent banking relationship for transactions. Coinbase said transfers will still pass through sanctions screening, and the firm can freeze or seize assets at the wallet level when required.

The new license moves Coinbase from institutional debt infrastructure toward a regulated structure for tokenized securities backed by shares. The exchange had already established Project Diamond in Abu Dhabi as a platform for blockchain-based financial instruments, initially focusing on digital debt products for institutional users. Project Diamond received in-principle approval from ADGM before issuing its first short-term discount note, which was denominated in USDC and issued on Coinbase's Base blockchain. In December 2024, the project integrated Chainlink's Cross-Chain Interoperability Protocol to give institutions cross-chain connectivity and on-chain data.

The ADGM framework itself has attracted growing interest from institutional players. In March, Ondo Finance received approval for tokenized U.S. stocks and exchange-traded funds within ADGM, with the products structured as equity-linked notes and admitted for trading through an FSRA-regulated Multilateral Trading Facility. BNY launched Bitcoin and Ether custody services in ADGM in May through a collaboration with Finstreet and the ADI Foundation, and it plans to support tokenized assets and stablecoins. BNY had $59.4 trillion in assets under custody and administration when the service was announced.

Coinbase itself already offers tokenized equities in other markets. In June, the exchange launched tokenized shares linked to SpaceX, Nvidia, Google, Strategy and Bitmine, backed 1:1. Users can buy, hold, trade and redeem the assets on-chain while receiving economic exposure to dividends.

Abu Dhabi becomes the center for Coinbase's tokenized securities and on-chain capital markets operations. The company is building its global derivatives business from Dubai. Coinbase has described both businesses as among its largest international projects outside the United States.

Coinbase Institutional co-CEO Brett Tejpaul said ADGM's decision to introduce a virtual-asset regulatory framework in 2018 was an important factor behind the choice of jurisdiction. “No major financial center has yet built a framework that treats tokenized equities simultaneously as securities, blockchain-native tokens, and DeFi-composable assets,” Tejpaul said.

ADGM Chief Market Development Officer Arvind Ramamurthy said Coinbase's decision represented an endorsement of the financial centre's regulatory framework. “As tokenisation becomes an increasingly important part of capital markets infrastructure, ADGM remains committed to supporting innovation that enhances market access, transparency and investor confidence, while upholding the highest standards of regulatory oversight,” Ramamurthy said.

The hub is being set up as governments, banks and investment firms across the Gulf put more capital behind tokenization. Consulting firm Kearney and tokenization infrastructure company Ctrl Alt estimated earlier this year that tokenized real-world assets across the Gulf Cooperation Council could represent close to $500 billion by 2030. Private markets, investment funds and bank deposits are expected to account for a large share of the total, with commodities alone representing roughly $14 billion.

Abu Dhabi-based tokenization company KAIO raised $8 million in April from investors including Tether, Systemic Ventures, Further Ventures and Nomura-backed Laser Digital. The platform manages about $100 million in on-chain assets and has processed more than $500 million in transactions, bringing products from managers including BlackRock, Brevan Howard and Hamilton Lane onto public blockchains through tokenized feeder funds.

Coinbase said its new permission gives the company the regulatory basis to arrange investment transactions and provide custody for its planned tokenized securities, with transfers remaining subject to ongoing sanctions screening.