Coinbase Secures Abu Dhabi License to Offer Tokenized Securities

Coinbase has obtained regulatory approval from the Abu Dhabi Global Market (ADGM) to establish an international tokenization hub for tokenized securities, as the company accelerates efforts to bring traditional securities on chain. The move places Coinbase among a growing roster of major financial institutions pursuing real-world asset (RWA) tokenization, a segment that has gained traction since BlackRock launched its tokenized treasury fund BUIDL on Ethereum in March 2024 and Franklin Templeton expanded its own on-chain money market offerings.

The license enables Coinbase to arrange deals and provide custody for digital securities. However, the company has not yet disclosed details regarding launch timing, which tokenized equities will be supported, or the jurisdictions from which investors will be able to participate. The approval also marks another step in Coinbase's international expansion strategy, as the exchange has increasingly pursued licenses outside the United States amid an unresolved domestic regulatory framework for digital assets.

FSRA Grants Financial Services Permission

The Financial Services Regulatory Authority (FSRA) awarded Coinbase a Financial Services Permission for its proposed tokenized-securities business. ADGM, established in 2015 as a financial free zone with its own independent civil and regulatory framework, has positioned itself alongside jurisdictions such as Switzerland, Singapore, and the European Union's DLT Pilot Regime in competing for tokenization and digital-asset business. Shares issued and registered in ADGM will be 100% physically backed, with ownership transfers conducted through crypto wallets rather than traditional brokerage accounts.

Verified holders may be eligible to receive economic and governance rights associated with the underlying securities, though those rights will be subject to conditions. Only holders meeting defined vesting requirements will be able to exercise voting and redemption rights. Dividends will be automatically reinvested rather than distributed directly to holders.

All transactions will be screened for sanctions, and Coinbase will retain the authority to freeze or seize assets at the wallet level if circumstances require it.

Brett Tejpaul, co-CEO of Coinbase Institutional, stated:

No major financial center has yet built a framework that treats tokenized equities simultaneously as securities, blockchain-native tokens, and DeFi-composable assets.

The Abu Dhabi hub will focus on tokenized securities and on-chain capital markets. This operation is separate from Coinbase's existing Dubai-based business, which concentrates on global derivatives.

Unanswered Questions and DeFi Integration

Several key details remain undisclosed. Coinbase has not identified the specific equities it plans to tokenize, the underlying blockchain, launch timing, fee structures, or the eligible jurisdictions for investors.

Transactions involving only digital securities will not require a brokerage or bank account, though participants eligible for redemption proceeds will need an appropriate account to receive funds.

Coinbase has also signaled an interest in integrating with decentralized finance (DeFi) offerings. Even as assets are tokenized on-chain, the company is exploring DeFi with built-in regulatory safeguards, including transfer-level compliance checks, sanctions screening, and wallet-level controls designed to protect the protocol. The extent to which DeFi composability can be reconciled with securities regulation remains an open question across jurisdictions.

The license suggests a step toward a more permissive market for tokenized assets in Abu Dhabi, though it remains unclear how open and accessible that market will be in practice. Whether the ADGM framework attracts sufficient institutional participation, and how competing jurisdictions respond, will help determine whether tokenized equities move beyond pilot-scale deployments.

Source: CryptoNewsNet