Coinbase chooses Abu Dhabi as global hub for tokenized has received regulatory permission in Abu Dhabi to set up an international tokenization hub for securities backed by underlying shares.
- ADGM approval: Coinbase can arrange investment deals and provide custody
- Tokenized securities: Products tied to underlying shares, not just crypto theater
- Compliance first: Sanctions screening, vesting rules, wallet freezes
- Abu Dhabi momentum: Coinbase joins Ondo, BNY, and others building there
The permission from Abu Dhabi Global Market’s Financial Services Regulatory Authority gives Coinbase a Financial Services Permission, or FSP, to build tokenized securities infrastructure inside one of the Middle East’s most serious financial centers. This is a real step, not a press-release cosplay move, and it pushes Coinbase’s institutional ambitions well beyond plain old exchange business. Coinbase establishes its tokenization hub in Abu Dhabi with a real regulatory footing.
Coinbase announced the approval on Aug. 11 and called it its “most significant step” yet toward building infrastructure for a more open, more accessible global financial system. In its own words, Coinbase establishes its tokenization hub in Abu Dhabi with the aim of pushing tokenization beyond the usual crypto circle jerk.
“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 on Aug. 11.
The new permission gives Coinbase the basis to arrange deals in investments and provide custody services for planned tokenized securities. That distinction matters. This is not a free-for-all where anyone can mint fake stocks and call it innovation. It is a regulated securities framework with blockchain rails attached.
For readers new to the term, tokenized securities are traditional securities represented on a blockchain as digital tokens. In this case, Coinbase says the products will be backed by underlying shares, meaning the real equity sits behind the token structure rather than the token floating around in a vacuum like a marketing gimmick with a ticker. Coinbase Establishes Tokenization Hub in Abu Dhabi with that setup in mind.
Coinbase says verified holders will receive economic rights tied to those assets. Some rights, including voting, depend on the conditions attached to the digital securities. That is an important legal wrinkle: owning the token is not always the same as owning a share in the simple brokerage-account sense. Coinbase Wins Abu Dhabi Approval to Launch Tokenized products that sit somewhere between crypto and conventional markets.
The company’s setup also includes a few very non-cypherpunk realities. Transfers remain subject to sanctions screening, and assets can be frozen or seized at the wallet level when required. That is exactly the kind of control regulators want in a securities product. It is also a reminder that this is permissioned finance, not libertarian magic dust.
Wallet-based access is still a meaningful shift. Coinbase says investors can hold the products in digital wallets without opening a traditional brokerage account or establishing a correspondent banking relationship. That lowers friction. It does not erase the old system entirely, but it does move the entry point closer to the chain.
That nuance matters because tokenized assets are often oversold as if they instantly blow up the existing financial stack. They do not. What they can do is make the stack more programmable, more portable, and in some cases easier to access. That is useful. It is also not the same thing as full decentralization, no matter how hard the marketing department squints.
The Abu Dhabi hub builds on Project Diamond, Coinbase’s institutional tokenization platform. Project Diamond initially focused on digital debt products and received in-principle approval from ADGM regulators before issuing its first debt instrument. That first instrument was a short-term discount note denominated in USDC and issued on Coinbase’s Base blockchain. The platform’s plumbing also leans on Chainlink's CCIP Enables Interoperability for Coinbase's tokenization efforts.
A short-term discount note is a debt instrument sold below face value and redeemed at maturity. USDC is a dollar-pegged stablecoin. Base is Coinbase’s Ethereum layer-2 network, built to handle on-chain activity at lower cost than the main Ethereum chain. In plain English: Coinbase has been building its own institutional rails, one regulated component at a time.
Project Diamond was initially available to registered institutional investors outside the United States. In December 2024, crypto.news reported that the platform had integrated Chainlink’s Cross-Chain Interoperability Protocol, or CCIP, giving institutions cross-chain connectivity and verifiable data for tokenized assets. That kind of plumbing matters if tokenized finance is going to be more than a closed club with better branding.
The platform uses Coinbase’s institutional stack, including custody services, on-chain wallets, and USDC settlement on Base. Peregrine, an ADGM-regulated entity operated by PSG Digital, was named as Project Diamond’s flagship user. That shows this is not just a sandbox demo with a fancy deck and a few buzzwords stapled on top.
Brett Tejpaul, Coinbase Institutional co-CEO, said ADGM stood out because it introduced one of the first virtual asset regulatory frameworks in 2018. He also put his finger on the real problem facing tokenized equities.
“No major financial center has yet built a framework that treats tokenized equities simultaneously as securities, blockchain-native tokens, and DeFi-composable assets, ” Brett Tejpaul said.
That is the core tension. Securities law wants clear ownership rules and controlled transfer. Blockchain wants tokens that move natively on-chain. DeFi wants assets that can plug into lending, trading, and settlement systems. It is easy to launch a token. It is much harder to make all three worlds behave without the legal equivalent of a bar fight.
ADGM, to its credit, has been trying to make that work. Arvind Ramamurthy, ADGM Chief Market Development Officer, said Coinbase’s decision endorsed the financial centre’s framework and highlighted tokenization’s growing role in capital markets infrastructure.
“As tokenisation becomes an increasingly important part of capital markets infrastructure, ADGM remains committed to supporting innovation that enhances market access, transparency and investor confidence, while upholding the highest standards of regulatory oversight, ” Arvind Ramamurthy said.
That is the standard regulatory pitch: innovation with guardrails. Sometimes guardrails are what make adoption possible. Sometimes they are what turn a bold idea into a heavily supervised product that looks a lot less rebellious once the paperwork lands.
Coinbase is not the only firm betting on Abu Dhabi. In March, Ondo Finance received approval for tokenized U.S. stocks and exchange-traded funds within ADGM. Its digital securities were admitted for trading through a Multilateral Trading Facility regulated by the FSRA, and the products were structured as equity-linked notes. Those instruments offered exposure to U.S. companies including Amazon, Apple, Microsoft, and Tesla.
In May, BNY Launches Bitcoin and Ether Custody in Abu Dhabi’s ADGM through a collaboration with Finstreet Limited and the ADI Foundation. BNY also said it planned to support tokenized assets and stablecoins. At the time of the announcement, BNY had $59.4 trillion in assets under custody and administration. When a giant like that leans into a jurisdiction, people notice.
Then there is KAIO, the Abu Dhabi-based tokenization company that raised $8 million in April from investors including Tether, Systemic Ventures, Further Ventures, and Nomura-backed Laser Digital. At the time of the funding announcement, KAIO said it managed about $100 million in on-chain assets and had processed more than $500 million in transactions. It has also worked on bringing products from asset managers including BlackRock, Brevan Howard, and Hamilton Lane.
That is the real story underneath the headline: Abu Dhabi is not chasing crypto noise. It is building a market for tokenized assets, custody, and regulated on-chain capital markets. Coinbase’s permission slots into that larger push.
The market opportunity helps explain the rush. Earlier this year, Kearney and Ctrl Alt estimated that tokenized real-world assets across the Gulf Cooperation Council could represent close to $500 billion by 2030. They said commodities alone could account for about $14 billion of that regional market. Forecasts are not facts, but they do show why regulators and institutions in the Gulf are trying to get position before the game gets crowded.
Coinbase’s wider UAE strategy also looks deliberate. The company is developing its global derivatives business from Dubai, while Abu Dhabi becomes the anchor for tokenized securities and on-chain capital markets operations. That split makes sense. The UAE is not one monolithic jurisdiction, and Coinbase appears to be treating it like a strategic map rather than a marketing slogan. USDT on TRON Gains Abu Dhabi Regulatory Approval: A further shows the emirate is open for business when the compliance boxes are ticked.
The company’s June launch of tokenized shares linked to SpaceX, Nvidia, Google, Strategy, and Bitmine fits that picture too. Coinbase said those products were backed 1:1, could be bought, held, traded and redeemed on-chain, and gave users economic exposure to dividends associated with the underlying shares. Coinbase framed that effort as part of its Everything Exchange strategy, which aims to bring equities, commodities, lending, payments and crypto into one venue. Coinbase Wins Abu Dhabi Approval for Tokenized Securities is another sign that the company is doubling down on the idea.
That is the upside case: more access, faster settlement, more programmable markets, and fewer layers of friction. If tokenized securities can actually deliver those benefits without wrecking investor protections, they could matter a lot.
But the tradeoffs are not small, and they are not hidden. Wallet-level freezes, sanctions screening, vesting conditions and redemption limits make these products far more controlled than the permissionless ideal many crypto natives dream about. That does not make them useless. It makes them regulated financial products with blockchain plumbing. Big difference.
The bigger question is what “ownership” really means when a token represents economic exposure rather than straightforward equity rights. Coinbase says holders can access economic benefits, while certain rights, including voting, depend on vesting conditions attached to the digital securities. That is not the same thing as holding ordinary shares through a brokerage account, and nobody serious should pretend otherwise.
There is also the practical issue of exits and enforcement. No brokerage account may be needed to hold or transfer the digital security, but redemption and some rights can still depend on traditional financial infrastructure. So yes, the access is broader. No, the old rails are not gone. They are just less visible.
What did Coinbase get from Abu Dhabi?
It received a Financial Services Permission from ADGM’s FSRA, allowing it to arrange investment deals and provide custody services for tokenized securities.
Does this mean Coinbase can issue share tokens however it wants?
No. The products sit inside a regulated securities framework, with sanctions screening, custody controls, and wallet-level freeze or seizure powers where required.
Do tokenized securities equal direct share ownership?
Not automatically. Coinbase says holders get economic rights tied to the assets, while some rights, including voting, depend on vesting conditions attached to the digital securities.
Why does Abu Dhabi matter here?
ADGM has had a virtual asset regulatory framework since 2018 and is actively courting tokenized assets, custody providers, and institutional finance players.
Is this truly decentralized finance?
Not in the pure, permissionless sense. It is regulated finance using blockchain infrastructure, which brings efficiency but also compliance, control, and central points of intervention.
Will tokenized equities replace traditional markets?
Not soon, and maybe not ever in full. The more realistic outcome is a hybrid model where tokenized products sit alongside existing markets and chip away at friction where they can.
That is what makes this move interesting. Coinbase is not just chasing another international office. It is planting a flag in a jurisdiction that is becoming a serious hub for tokenization, while building a regulatory base for products that sit halfway between old-school securities and on-chain finance.
The hype crowd will call it the future. The skeptics will call it TradFi with a blockchain skin suit. The truth is closer to both. Real infrastructure is being built here, but it is being built inside the rulebook, not outside it. For crypto, that is progress. For pure decentralization, it is a compromise. For Coinbase, it is probably exactly the point.
Further Reading
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