Coinbase (COIN) shares extended their rally after regulators in Abu Dhabi approved the company's planned international hub for tokenized securities. COIN, the Nasdaq-listed stock of Coinbase Global, Inc., closed 9.55% higher at $160.20 and then rose a further 8.28% to $173.47 in pre-market trading. The approval strengthens Coinbase's expansion into regulated, blockchain-based securities and institutional financial services, while also signaling growing regulatory support for tokenization in a major financial center.

Abu Dhabi approval covers dealing and custody

The Financial Services Regulatory Authority of Abu Dhabi Global Market (ADGM) granted Coinbase Financial Services a Financial Permission for its planned tokenization business. The authorization allows Coinbase to arrange investment deals and to provide custody services for tokenized securities. These securities will be backed by underlying shares while operating inside ADGM's regulated financial framework.

Verified holders will receive economic rights linked to the securities they hold through the platform. However, some shareholder rights, including voting powers, will depend on the conditions attached to each digital security. Coinbase will also apply sanctions screening to transfers conducted through supported blockchain wallets.

The structure allows users to hold tokenized securities without opening conventional brokerage accounts, and it reduces reliance on correspondent banking relationships for transactions involving supported securities. Coinbase can freeze or seize assets at the wallet level when legal or regulatory requirements apply.

Project Diamond underpins the expansion

Coinbase developed its Abu Dhabi tokenization strategy through Project Diamond before receiving the latest regulatory permission. The platform initially focused on issuing blockchain-based debt instruments for registered institutional market participants. It later issued a short-term USDC-denominated discount note through Coinbase's Base blockchain network.

Project Diamond subsequently expanded its infrastructure through an integration with Chainlink's Cross-Chain Interoperability Protocol. The integration added cross-chain connectivity and data verification services for institutions using tokenized financial products. Coinbase also combined custody, institutional wallets and USDC settlement within the platform. The latest approval expands that structure beyond digital debt and into securities backed by company shares.

Abu Dhabi has become an important location for Coinbase's wider international capital markets strategy. ADGM introduced its virtual asset regulatory framework in 2018 and has continued attracting blockchain-focused financial companies, making it a practical venue for firms that want to test tokenized products inside a regulated setting.

COIN rises as Coinbase builds out UAE operations

Coinbase is entering a tokenized securities market in Abu Dhabi that already includes several regulated financial companies. Ondo Finance received approval for tokenized United States stocks and exchange-traded funds earlier this year. BNY also launched Bitcoin and Ethereum custody services through an ADGM-based partnership in May.

Coinbase has separately introduced tokenized shares linked to companies including Nvidia, Google, Strategy and SpaceX. Those products provide blockchain-based economic exposure while maintaining backing linked to their underlying assets. The company has positioned tokenization within its broader strategy covering crypto, equities, payments, lending and commodities.

Coinbase plans to separate its major United Arab Emirates operations between Abu Dhabi and Dubai. Abu Dhabi will host tokenized securities activities, while Dubai will support the company's international derivatives operations. The expansion comes as regional tokenized assets could approach $500 billion across Gulf markets by 2030.

Source: CoinCentral