Coinbase has obtained regulatory approval in Abu Dhabi to establish an international tokenization hub, providing the cryptocurrency exchange with a regulated base for migrating traditional securities onto blockchain infrastructure.

The company was granted Financial Services Permission by the Financial Services Regulatory Authority (FSRA) on August 11, allowing it to operate from the Abu Dhabi Global Market (ADGM), the UAE capital's international financial center. Coinbase described the approval as its most significant step to date toward building infrastructure for global onchain capital markets.

The hub will facilitate regulated securities tokenization, investment matching, and custody services. Eligible investors located outside restricted jurisdictions will be able to access tokenized securities through blockchain wallets, rather than relying solely on conventional brokerage and banking infrastructure.

Tokenized Securities Backed by Underlying Assets

Coinbase's framework centers on security tokens that are backed by underlying traditional securities, rather than synthetic contracts that merely track market prices. The approach builds on the company's existing 1:1-backed tokenized U.S. stock initiative, in which blockchain tokens represent actual shares while supporting onchain transfers, redemptions, and investor entitlements.

Wallet-level compliance is integrated into the infrastructure. Eligible addresses can be screened for sanctions and jurisdictional restrictions, and regulated controls can block transfers when necessary. The permission falls under ADGM's broader regulatory framework covering digital securities, virtual assets, tokenized funds, and other blockchain-based financial products.

The Abu Dhabi operation is designed for international markets and does not introduce a new tokenized-securities offering for U.S. customers. Coinbase is currently engaged in litigation with the U.S. Securities and Exchange Commission, which alleged in a June 2023 lawsuit that certain digital assets traded on the platform qualify as unregistered securities.

Abu Dhabi as Coinbase's Tokenization Base

The new hub provides Coinbase with a regulated venue for issuance, custody, and distribution as tokenized securities transition from experimental products toward a mainstream capital-market business. The asset class has drawn institutional participation, including BlackRock's launch of BUIDL, a tokenized treasury fund deployed on Ethereum in March 2024.

Coinbase has already linked stablecoins with regulated investment products through its USDC and EURC rails for Spiko's tokenized UCITS money-market funds. The Abu Dhabi permission adds a securities-focused regulatory layer to that existing infrastructure.

ADGM has established separate frameworks for digital securities and virtual assets. Firms conducting regulated financial activities within the center are required to obtain FSRA permission. The jurisdiction has previously hosted regulated tokenized securities backed by both private and public-market assets. The UAE has developed multiple regulatory pathways for digital-asset firms, including Dubai's Virtual Assets Regulatory Authority (VARA) and Abu Dhabi's FSRA regime.

Coinbase's UAE presence now encompasses the Abu Dhabi tokenization operation alongside its broader regional activities, as the company constructs trading, custody, and settlement infrastructure outside the United States. The exchange has previously obtained a derivatives license in Bermuda and an e-money license from the Central Bank of Ireland.

Tokenized Stock Market Expands Beyond Crypto Exchanges

The approval comes as tokenized stocks have grown into a $1.8 billion onchain market, led by platforms including Ondo and xStocks.

Competition has intensified across exchanges and blockchain-native platforms. Hyperliquid recently added native xStocks spot markets for Nvidia, SPY, QQQ, SK Hynix, and Micron, while Ondo has deployed hundreds of tokenized equities and ETFs across multiple blockchain networks.

Coinbase's Financial Services Permission establishes a regulated Abu Dhabi base for building the issuance, custody, and distribution infrastructure supporting these categories of onchain securities, with access governed by product eligibility and jurisdictional requirements.