Coinbase secures Abu Dhabi license for tokenized securities
Coinbase has secured Abu Dhabi regulatory approval to arrange investment deals and provide custody as it prepares an international hub for tokenized securities and onchain capital markets.
Summary
- Coinbase has received Financial Services Permission from Abu Dhabi Global Market’s financial regulator.
- The authorization covers arranging investment deals and providing custody for tokenized securities.
- Eligible token holders will receive shareholder rights, including dividends and voting rights.
- Coinbase plans to operate major tokenization and derivatives businesses from Abu Dhabi and Dubai.
Coinbase secures approval for tokenized securities
Coinbase said in an announcement published by Abu Dhabi Global Market that the Financial Services Regulatory Authority had granted the exchange Financial Services Permission to arrange investment deals and provide custody services.
The authorization gives Coinbase a regulated base within ADGM, Abu Dhabi’s international financial center, for issuing and servicing digital securities linked to traditional financial assets. Under the planned structure, Coinbase will register and issue the securities in ADGM under FSRA supervision.
Rather than using the emirate only for cryptocurrency trading, the company plans to make Abu Dhabi its primary international tokenization center outside the United States. Services developed there will focus on bringing securities and other capital-market products onto blockchain networks.
Each tokenized security will be backed by an underlying share, Coinbase said. Eligible verified holders will receive rights connected to the represented stock, including dividend and voting rights, subject to the terms contained in the relevant prospectus.
Under the conditions described for the product, dividend payments will be reinvested automatically. Some voting and redemption rights will also depend on whether a holder meets the applicable vesting requirements, meaning access to every shareholder function may not be immediate or available under identical terms.
The licensing announcement did not identify the first shares Coinbase will tokenize, the blockchain networks that will support them, or a date for the initial offering. It also did not specify which countries’ residents will qualify to purchase the securities.
Wallets will replace conventional brokerage accounts
Unlike a normal stock purchase, investors will not need a conventional brokerage account or a correspondent banking relationship to hold the planned securities, according to Coinbase. Eligible users will instead need a compatible blockchain wallet.
Transfers will remain subject to compliance controls despite taking place through wallets. Coinbase said every transaction will undergo continued sanctions screening, while the company will retain the ability to freeze or seize assets at the wallet level when regulations require it.
The control mechanism places restrictions directly into the tokenized-security system rather than relying only on checks at the point of purchase. Coinbase presented the model as a way to make blockchain-based assets compatible with securities regulation and decentralized finance applications.
Brett Tejpaul, co-CEO of Coinbase Institutional, said ADGM had established one of the first regulatory systems for virtual assets in 2018 and had continued developing rules for blockchain-based financial products.
“No major financial center has yet built a framework that treats tokenized equities simultaneously as securities, blockchain-native tokens, and DeFi-composable assets,” Tejpaul said.
Arvind Ramamurthy, ADGM’s chief market development officer, described the planned hub as an endorsement of Abu Dhabi’s role in blockchain-based finance. He said the financial center would continue supporting products designed to improve market access and transparency while maintaining regulatory oversight.
The planned ownership model follows Coinbase’s earlier work on 1:1-backed tokenized stocks with Base, its Ethereum layer-2 network. Crypto.news reported in July that Base founder Jesse Pollak said the companies were close to introducing equities backed by actual underlying shares.
Pollak contrasted the planned product with stock-linked derivatives that track share prices without giving customers ownership of the represented stock. At that time, neither Base nor Coinbase had disclosed the product’s custody arrangements, issuance process or supported securities.
Abu Dhabi license adds to Coinbase’s UAE operations
From Abu Dhabi, Coinbase plans to build its tokenized-securities and on-chain capital markets business, while Dubai will serve as a base for its international derivatives operations. The company described the two units as among its most ambitious businesses outside the United States.
The separate locations also place the operations under different regulatory systems. ADGM and its FSRA oversee financial services in Abu Dhabi’s financial free zone, while the Dubai Virtual Assets Regulatory Authority supervises virtual-asset businesses operating in or from Dubai, except those based in the Dubai International Financial Centre.
Coinbase’s selection of the UAE comes as other financial institutions build regulated digital-asset services in Abu Dhabi. In May, crypto.news covered BNY’s custody plans with Finstreet and ADI Foundation, beginning with Bitcoin and Ether before a proposed expansion into stablecoins and tokenized real-world assets.
BNY said that work would be based in ADGM and remain subject to final agreements and regulatory approvals. The proposed service uses Finstreet’s licensed trading, settlement, custody, and investment infrastructure alongside the ADI Chain blockchain network.
Coinbase is also expanding products for professional investors in the United Kingdom. Its recent UK derivatives rollout includes more than 170 contracts covering cryptocurrencies, equities, commodities, and foreign exchange.
Eligible UK professional clients will receive progressive access to perpetual contracts offering continuous trading and leverage of up to 50 times. Dated futures will carry leverage of up to 20 times, while the options offering will initially cover crypto assets.
U.S. rules remain central to Coinbase’s tokenization plans
For American investors, the Abu Dhabi approval does not by itself authorize Coinbase to offer the ADGM-issued securities in the United States. Any domestic product involving tokenized shares would remain subject to U.S. securities laws and SEC oversight.
In June, U.S. exemption discussions centered on a possible SEC framework that could allow companies to test blockchain-based securities under modified regulatory requirements. Lawyers and market participants cited by Reuters expected SEC Chair Paul Atkins to introduce an innovation exemption, although the regulator had not finalized the reported plan.
Coinbase had already disclosed plans for tokenized shares backed one-for-one by underlying securities as those discussions continued. CoinGecko data cited in the June report showed the number of listed tokenized stocks rising from 14 in January 2024 to 478 by May 2026, an increase of more than 3,300%.
Competition has since reached the U.S. market. Dinari introduced tokenized versions of all S&P 500 stocks for eligible American investors in August, using self-custody wallets funded with USDC. The company said each token is backed by an underlying security held with a regulated custodian and includes voting, dividend, and redemption rights.
Outside tokenization, Coinbase began giving eligible UK customers access to U.S. equities on Aug. 6. The phased service covers nearly 4,000 stocks, supports purchases funded with pounds or USDC, and allows fractional investments from £1, while Apex executes and clears the orders and holds the shares in the United States.
