Coinbase Secures Abu Dhabi License for Tokenized Securities
Coinbase has secured Financial Services Permission from the Financial Services Regulatory Authority of Abu Dhabi Global Market, clearing the company to arrange investment transactions and provide custody services for tokenized securities.
Summary:
- Coinbase received an FSRA Financial Services Permission in Abu Dhabi.
- The license covers arranging investment deals and providing custody.
- Tokenized securities will be backed by underlying shares and issued under ADGM oversight.
- Transfers remain subject to sanctions screening and wallet-level enforcement controls.
The approval establishes the regulatory foundation for Coinbase’s planned international tokenization hub in Abu Dhabi, where the company intends to combine traditional shareholder rights with blockchain-native ownership and wallet-based distribution.
The license covers more than simply issuing tokens
The significance of the FSRA approval lies in the activities Coinbase is now authorized to perform.
Rather than launching synthetic tokens that merely track the price of public equities, Coinbase plans to facilitate digital securities backed by underlying shares and issued within ADGM’s regulated framework.
The structure brings several functions under the same operating model:
- Investment arrangement: Coinbase can facilitate transactions involving qualifying tokenized securities.
- Custody: The company can provide regulated custody supporting the underlying investment structure.
- Blockchain ownership: Investors can hold and transfer eligible digital securities through compatible wallets.
- Compliance controls: Wallet activity remains subject to sanctions screening and regulatory enforcement.
- Shareholder economics: Eligible holders can receive economic benefits tied to the underlying shares.
That combination matters because tokenizing a security does not remove the legal infrastructure surrounding ownership. The harder task is making an onchain token correspond to enforceable rights in the underlying asset.
Coinbase’s ADGM framework is designed specifically around that link.
Token holders can receive shareholder rights, but eligibility matters
Coinbase says securities registered and issued in ADGM will be fully backed by underlying shares under FSRA supervision.
Verified token holders can receive rights associated with those shares, including economic participation and, in certain circumstances, voting and redemption rights.
According to the prospectus terms cited by Coinbase, only Vested Holders may exercise certain rights relating to the underlying securities, including voting. Dividends are automatically reinvested, and both vested and unvested holders may benefit economically from that reinvestment.
Redemption rights are also limited to eligible vested holders.
That distinction makes the structure more sophisticated than the simplified claim that every token automatically provides identical shareholder rights. The precise rights depend on the status of the holder and the terms governing each digital security.
Wallet access reduces one barrier, but does not eliminate financial infrastructure
Coinbase is positioning the hub around a broader access argument.
The company estimates that roughly 4 billion people globally lack access to conventional capital markets, arguing that high participation costs, brokerage requirements and banking infrastructure exclude large parts of the population from investable opportunities.
Tokenization can reduce some of those barriers because transfers of the digital security itself do not necessarily require the investor to establish a traditional brokerage account or correspondent banking relationship.
A compatible wallet can serve as the ownership interface.
That claim also requires a caveat. Coinbase’s own disclosure states that a vested holder seeking to exercise redemption rights must have an applicable brokerage or bank account capable of receiving the redemption proceeds.
READ MORE: UK Accelerates Tokenized Gold and Retail Crypto Growth
In other words, blockchain can simplify holding and transferring a security, but certain interactions with the underlying traditional asset still depend on conventional financial infrastructure.
That distinction is important when evaluating how far tokenization has actually replaced brokerage and banking functions.
Coinbase is trying to make regulated securities DeFi-compatible
One of the more consequential aspects of the model is how Coinbase intends to reconcile decentralized finance with regulatory controls.
Every transfer will be subject to ongoing sanctions screening. Coinbase says assets can also be frozen or seized at the wallet level where legally required.
This means the securities are blockchain-native without being permissionless in the same way as Bitcoin or many DeFi tokens.
The architecture attempts to preserve composability while embedding regulatory controls directly into the ownership layer.
Brett Tejpaul, Co-CEO of Coinbase Institutional, said ADGM has gone further than other major financial centers in developing a framework that can treat tokenized equities simultaneously as securities, blockchain-native assets and instruments capable of interacting with DeFi.
That three-way classification is central to Coinbase’s strategy. A tokenized stock is only substantially different from a conventional brokerage position if it can interact with blockchain infrastructure while retaining legally enforceable securities rights.
Abu Dhabi gives Coinbase a regulatory base for international expansion
ADGM has been developing digital asset rules since 2018, giving Coinbase a jurisdiction with an established regulatory framework rather than one designed specifically around the company’s arrival.
Arvind Ramamurthy, ADGM’s Chief Market Development Officer, said Coinbase’s decision to establish the hub reinforces Abu Dhabi’s effort to become a center for regulated blockchain-based financial infrastructure.
For Coinbase, Abu Dhabi is also part of a wider UAE strategy.
The company is building two major businesses in the country: an Abu Dhabi hub focused on tokenized securities and onchain capital markets, alongside a separate Dubai operation focused on global derivatives.
That division is strategically important. Instead of using the UAE simply as an offshore crypto trading base, Coinbase is assigning different parts of its institutional expansion to separate regulatory centers.
The real test is whether tokenized shares become usable capital-market assets
The FSRA license removes one of the largest regulatory obstacles to Coinbase’s tokenization plan, but the commercial test comes next.
The value of the hub will depend on what securities are actually issued through it, which investors qualify to hold them and whether those assets develop meaningful liquidity beyond initial issuance.
The more consequential question is whether tokenized equities can eventually be used inside broader onchain financial markets without losing the investor protections attached to their underlying shares.
Coinbase now has permission to build that bridge in Abu Dhabi. The next evidence will come from the first securities launched under the framework and the extent to which investors can move, trade and use those assets onchain while remaining inside the FSRA’s regulatory perimeter.
The information presented in this article is intended for informational purposes only and should not be interpreted as financial, investment, or trading advice. Coinspress.com does not promote or advocate for any particular investment strategy, asset, or cryptocurrency project. Cryptocurrency markets are highly volatile and unpredictable – always perform your own research and seek guidance from a qualified financial professional before making any investment decisions.
Alexander Stefanov
Reporter at CoinsPress
Alex is Editor-in-Chief of Coinspress and co-founder of Millennial Media Group, with nearly a decade of experience covering financial markets - crypto first, then everything else. It started in 2016 with Bitcoin. Like most people at the time, he didn't fully understand it - so he kept digging. Blockchain, tokenomics, the projects, the cycles. That curiosity never stopped, and eventually pulled him into traditional markets too: equities, commodities, macro. Not because he left crypto behind, but because you can't properly understand one without the other. What drives him is straightforward: he wants to know why something is happening, not just that it's happening. Most market coverage stops at the headline - price up, price down, here's a chart. Alex finds that kind of reporting actively unhelpful. If you walk away from an article without understanding the mechanism behind the move, what did you actually learn? He holds a degree in Tourism from New Bulgarian University - not the most obvious path into financial markets, but markets have a way of pulling in people who are simply too curious to stay out. He has authored over 200 in-depth analyses and more than 10,000 articles across crypto and traditional finance. He still thinks every day in markets teaches him something new. That's probably why he hasn't stopped.
