Crypto exchange giant Coinbase has chosen Abu Dhabi as its "international tokenization hub," marking a major coup for the emirate as the company works to bring more traditional financial assets onto the blockchain.

Coinbase, the largest cryptocurrency exchange in the United States and a publicly listed company on Nasdaq since 2021, will base the operation out of Abu Dhabi Global Market (ADGM), the emirate's international financial center, which operates under English common law — a framework designed to be familiar to international financial institutions. From there, it has been granted a license to arrange deals in investments and to securely hold digital assets, clearing the way for the launch of tokenized securities. The securities will be backed by real shares and issued under ADGM's regulatory framework.

Investors will be able to hold the tokenized assets in digital wallets, eliminating the need for a brokerage account or a correspondent banking relationship. Proponents of tokenization argue the format can allow assets to settle around the clock and be divided into fractional units, lowering barriers to access.

"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 in a statement announcing the decision last week.

Abu Dhabi has been keen to position itself as a major player in that shift. In 2018, ADGM issued one of the world's first regulatory frameworks for virtual assets, making it an early mover in digital asset regulation and giving its Financial Services Regulatory Authority years of experience overseeing the sector before tokenized securities go live.

The new hub forms part of Coinbase's wider expansion across the United Arab Emirates. The company already runs Project Diamond in Abu Dhabi, which focuses on digital debt for institutional investors, while its derivatives business is based in Dubai. The UAE push sits within a broader international expansion that also saw Coinbase secure a licence under the European Union's Markets in Crypto-Assets (MiCA) framework in 2024.

More broadly, the Gulf has been leveraging its sovereign wealth funds to invest in tokenization, the representation of real-world assets such as securities, funds, and deposits as digital tokens on a blockchain. Global asset managers have moved into the same territory: BlackRock launched a tokenized US dollar fund for institutions in 2024, and Franklin Templeton operates an on-chain government money market fund. Global consulting firm Kearney predicts that close to $500 billion of Gulf Cooperation Council (GCC) assets will be represented on blockchain by 2030, led by private markets, funds, and bank deposits.

Melissa Hancock's full report on how the UAE is building its tokenization industry is available here.

Sources: Fortune | Coinbase announcement | ADGM announcement