Hassan Maishera
TL;DR
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Coinbase has received Financial Services Permission from the UAE’s Financial Services Regulatory Authority.
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The exchange plans to establish an international tokenization hub in Abu Dhabi Global Market.
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Its license permits Coinbase to arrange investment deals and provide custody services.
Coinbase (COIN) has secured Financial Services Permission from the Financial Services Regulatory Authority in the United Arab Emirates, marking a major step in its international expansion.
The US-based cryptocurrency exchange announced the approval on Tuesday, saying it advances the company’s goal of connecting more than 4 billion people to global capital markets through tokenization.
Coinbase intends to use the license to establish an international tokenization hub in Abu Dhabi Global Market Square.
“This is the most significant step we have taken yet toward building the infrastructure for a more open, more accessible global financial system,” Coinbase said.
License Supports Investment and Custody Services
The regulatory approval allows Coinbase to arrange investment deals and provide custody services within the ADGM framework.
These permissions will form the foundation of the company’s tokenized-securities strategy in Abu Dhabi. Coinbase aims to create regulated infrastructure through which investors can access conventional financial assets using blockchain-based technology.
The initiative represents another step in the convergence of cryptocurrency markets and traditional finance, with tokenization enabling assets such as shares to be issued and transferred onchain.
Securities registered and issued within ADGM will be fully collateralized by their underlying shares and subject to FSRA oversight.
Unlike synthetic products that merely track an asset’s market price, the planned structure will grant verified token holders comprehensive shareholder rights. These include eligibility for dividend payments and participation in corporate voting.
Backing each token with an underlying share is intended to ensure that the onchain asset represents a legally recognized economic interest rather than simple price exposure.
This distinction is becoming increasingly important as cryptocurrency exchanges introduce different forms of tokenized equities. Some products provide only derivative exposure, while regulated, asset-backed models can preserve the ownership rights associated with traditional shares.
Digital Wallets Replace Traditional Brokerage Accounts
Coinbase says investors will be able to access tokenized securities without opening a conventional brokerage account or establishing a correspondent banking relationship.
Instead, eligible participants will need a compatible digital wallet. This approach could reduce some of the operational barriers associated with accessing international capital markets.
Tokenization may also support faster settlement, fractional ownership and continuous asset transfers. However, access will remain subject to identity verification and regulatory requirements.
Coinbase’s broader objective is to make global investment markets available to a larger population, particularly in regions where conventional brokerage and banking infrastructure remains limited.
Although the securities will operate onchain, Coinbase’s proposed system will include compliance controls designed to satisfy financial regulations.
Every transaction will undergo continuous sanctions screening. Assets may also be frozen or seized at the wallet level when required by regulators or law enforcement.
These measures are intended to combine the accessibility of decentralized finance with the oversight expected in regulated securities markets.
The structure shows how institutional tokenization may differ from permissionless DeFi. While transactions use blockchain infrastructure, verified identities, transfer restrictions and enforcement mechanisms remain built into the system.
Coinbase Highlights ADGM’s Regulatory Framework
Coinbase identified Abu Dhabi’s early approach to cryptocurrency regulation as an important reason for establishing its tokenization operations in the emirate.
“ADGM issued one of the world’s first regulatory frameworks for virtual assets in 2018,” Coinbase Institutional co-CEO Brett Tejpaul said. “That reflected a genuine institutional commitment to innovation-forward regulation, executed with the rigor that global financial markets require.”
ADGM has sought to position itself as a regulated center for digital assets, attracting cryptocurrency exchanges, custodians, asset managers and blockchain companies.
The FSRA’s established framework gives Coinbase a regulated environment in which to develop products connecting traditional securities with onchain infrastructure.
Alongside its tokenized-securities and onchain capital-markets hub, Coinbase plans to establish a global derivatives center in the UAE.
The additional investment highlights the country’s growing importance in Coinbase’s international strategy. Derivatives could allow the exchange to serve institutional and professional traders seeking products beyond conventional spot cryptocurrency markets.
