Coinbase secures Abu Dhabi license for tokenized securities

Coinbase received Financial Services Permission from the Financial Services Regulatory Authority of Abu Dhabi Global Market (ADGM), according to CoinDesk reporting. The license allows the exchange to arrange investment deals and provide custody for tokenized securities in the emirate.

The approval marks the first time a major financial center has built a regulatory framework treating tokenized equities simultaneously as securities, blockchain-native tokens, and DeFi-composable assets, according to Brett Tejpaul, co-CEO of Coinbase Institutional, quoted in the CoinDesk report. Coinbase plans to use the license to offer digital securities backed by underlying shares, with tokens registered and issued in ADGM under FSRA oversight.

The move builds on Coinbase's existing institutional tokenization efforts. In 2023, Coinbase's asset management arm initiated Project Diamond to let institutional investors issue and trade digital debt instruments using Base, Coinbase's Ethereum-based blockchain network, according to CoinDesk's reporting.

The timing aligns with recent activity in Abu Dhabi's tokenization market. Last month, Mubadala Capital, the asset management arm 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 taking exposure to the fund, per CoinDesk.

Abu Dhabi Global Market introduced a regulatory framework for virtual assets in 2018, according to CoinDesk's reporting. Coinbase operates a derivatives business in Dubai, which will sit alongside the Abu Dhabi tokenization hub operation.

The brief does not specify when the regulatory approval was formally granted, the timeline for launching tokenized securities offerings, or expected volume and types of assets to be tokenized. Fees, minimum investment thresholds, and specific operational launch dates for the Abu Dhabi hub are also not detailed in the available reporting.