Coinbase Chooses Abu Dhabi for Global Tokenization Initiative

Finance Coinbase Chooses Abu Dhabi for Global Tokenization Initiative

The cryptocurrency exchange announced it has obtained regulatory clearance to provide tokenized securities from Abu Dhabi, reinforcing the emirate's commitment to on-chain finance.

By Krisztian Sandor|Edited by Jamie Crawley 42 min ago 2 min read

• Coinbase is launching an international tokenization hub in Abu Dhabi, acquiring a Financial Services Permission from the Abu Dhabi Global Market’s regulator to facilitate investment transactions and custody of tokenized securities.
• The exchange aims to issue and register digital securities supported by underlying shares, all under the supervision of Abu Dhabi, categorizing them as securities, blockchain-native tokens, and DeFi-compliant assets.
• This new Abu Dhabi initiative, along with Coinbase’s derivatives operations in Dubai and previous projects like Project Diamond, enhances the company’s presence in the UAE as the emirate aspires to become a prominent testing ground for tokenization.

Coinbase (COIN) is establishing its international tokenization hub in Abu Dhabi, providing the exchange with a regulatory foundation to transition traditional securities onto the blockchain outside the U.S.

On Tuesday, the company announced it received Financial Services Permission from the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM), enabling it to manage investment transactions and offer custody for tokenized securities.

With this license, Coinbase intends to offer digital securities that are backed by real shares. These tokens will be both registered and issued within ADGM under the oversight of the FSRA.

This development aligns with the growing trend of tokenization in traditional finance, as global asset managers and banks increasingly place funds, bonds, private credit, and stocks on blockchain platforms. Advocates believe this technology can facilitate around-the-clock transfers of securities, enable near-instant trade settlements, and ultimately allow them to be used as collateral in on-chain markets.

Abu Dhabi is positioning itself as a critical testing environment for this trend. The ADGM established a regulatory framework for virtual assets back in 2018, attracting various crypto and tokenization companies seeking a compliant base in the region.

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

Prior to Tuesday's regulatory approval, Coinbase had already made strides in the United Arab Emirates. In 2023, its asset management division launched Project Diamond, enabling institutional investors to issue and trade digital debt instruments via Base, Coinbase’s Ethereum-based blockchain. Last month, Mubadala Capital, the asset management branch of Abu Dhabi's sovereign wealth fund, tokenized one of its private-market investment strategies through UAE-based infrastructure provider KAIO on blockchain, including Base, with Coinbase also taking part in the fund.

The Abu Dhabi operation will complement Coinbase's derivatives business in Dubai, further expanding its UAE presence for business ventures outside the U.S.