Coinbase picks Abu Dhabi for its global tokenized asset push

Coinbase is establishing its global tokenization hub in Abu Dhabi, granting the cryptocurrency exchange a regulatory foothold to introduce traditional securities onto the blockchain outside the United States. The company obtained Financial Services Permission from Abu Dhabi Global Market's Financial Services Regulatory Authority (FSRA) on Tuesday, enabling it to facilitate investment deals and provide custody for tokenized securities.

Coinbase intends to employ the license to issue digital securities backed by underlying shares, with the tokens registered and issued in ADGM under FSRA supervision. This move aligns with the growing interest in tokenization across traditional finance, as global asset managers and banks digitize funds, bonds, private credit, and stocks for blockchain-based trading.

Abu Dhabi has emerged as a primary testing ground for this trend, with ADGM implementing a regulatory framework for virtual assets in 2018 and attracting crypto and tokenization firms seeking a regulated environment in the region. Brett Tejpaul, co-CEO of Coinbase Institutional, highlighted that no major financial center has yet established a framework treating tokenized equities as securities, blockchain-native tokens, and DeFi-composable assets simultaneously.

Coinbase had previously set up a presence in the UAE in 2023, launching Project Diamond, which allows institutional investors to issue and trade digital debt instruments using Coinbase's Ethereum-based blockchain network. Recently, Mubadala Capital, the asset management division of Abu Dhabi's sovereign wealth fund, tokenized a private-market investment strategy through UAE-based infrastructure provider KAIO on blockchain, with Coinbase holding exposure to the fund.

The Abu Dhabi operation will complement Coinbase's derivatives business in Dubai, providing the company with two bases in the UAE to expand its operations beyond the U.S.