Coinbase has secured a Financial Services Permission from Abu Dhabi Global Market's regulator to establish an international tokenization hub. The license allows Coinbase to custody and arrange deals for digital securities backed 1:1 by underlying shares outside the U.S. While token holders bypass traditional brokerage accounts, full voting and redemption rights are restricted to verified Vested Holders, and dividends are automatically reinvested. This expansion anchors Coinbase's dual-hub strategy in the UAE alongside its Dubai derivatives business.
Abu Dhabi regulatory approval
- ▪Coinbase secured a Financial Services Permission from the Financial Services Regulatory Authority of the Abu Dhabi Global Market on August 11, 2026, to establish an international tokenization hub.
- ▪The Financial Services Permission allows Coinbase to arrange investment deals and provide custody for tokenized securities under Abu Dhabi Global Market oversight.
Tokenized securities product features
- ▪Investors in Coinbase's tokenized securities will access them using a digital wallet rather than a traditional brokerage account or correspondent banking relationship.
- ▪Coinbase stated that every transfer of its tokenized securities is subject to ongoing sanctions screening, and the company can freeze or seize assets at the wallet level.
- ▪Coinbase plans to issue and register digital securities backed 1:1 by underlying shares, which will be available only in eligible jurisdictions outside the United States.
Voting rights restrictions
- ▪Only verified token holders designated as Vested Holders may exercise voting rights over the underlying shares of Coinbase's tokenized securities.
- ▪Exercising redemption rights for Coinbase's tokenized securities requires a brokerage or bank account capable of receiving proceeds, whereas trading the tokens does not.
Dividend reinvestment mechanism
- ▪Coinbase stated that the automatic reinvestment of dividends is designed to benefit both vested and unvested token holders.
- ▪Dividends from Coinbase's tokenized securities will be automatically reinvested rather than paid out directly to token holders.
UAE market expansion strategy
- ▪Coinbase closed its acquisition of the Dubai-based derivatives venue Deribit in August 2025, when the platform carried approximately $60 billion in open interest.
- ▪In December 2023, Coinbase's institutional smart-contract platform, Project Diamond, entered the Abu Dhabi Global Market Financial Services Regulatory Authority's RegLab sandbox.
- ▪Coinbase is operating two hubs in the United Arab Emirates, placing the Abu Dhabi tokenization hub alongside its global derivatives business in Dubai.
ADGM virtual asset framework
- ▪The Abu Dhabi Global Market established one of the world's first regulatory frameworks for virtual assets in 2018.
- ▪Brett Tejpaul, Co-CEO of Coinbase Institutional, stated that no major financial center has yet built a framework treating tokenized equities simultaneously as securities, blockchain-native tokens, and DeFi-composable assets.
Story comments
Loading comments…