Coinbase has obtained regulatory permission in Abu Dhabi to establish an international tokenization hub. The Financial Services Regulatory Authority of Abu Dhabi Global Market has granted Coinbase Financial Services Permission to arrange deals in investments and provide custody services for tokenized securities.
The hub will support the issuance and custody of securities backed by underlying shares, with verified holders receiving economic rights tied to the assets. Certain shareholder rights, including voting, will depend on vesting conditions attached to the digital securities.
Tokenization Plans
Coinbase's institutional tokenization plans have been underway for some time, with the establishment of Project Diamond as a platform for issuing blockchain-based financial instruments. The project initially focused on digital debt products for institutional users and received in-principle approval from ADGM regulators.
Expansion and Integration
The platform has since expanded to include integration with Chainlink's Cross-Chain Interoperability Protocol, providing institutions with access to cross-chain connectivity and verifiable data for tokenized assets. Coinbase Institutional co-CEO Brett Tejpaul cited ADGM's introduction of a virtual asset regulatory framework in 2018 as a key factor in the company's choice of jurisdiction.
Market Developments
Coinbase is entering an Abu Dhabi market where other financial and crypto companies have already received permission to offer blockchain-based investment products. Ondo Finance, for example, received approval for tokenized U.S. stocks and exchange-traded funds within ADGM in March.
Institutional Custody
Institutional custody infrastructure has also developed in the region, with BNY launching Bitcoin and Ether custody services in ADGM in May. The bank plans to support tokenized assets and stablecoins, bringing one of the world's largest traditional custodians into Abu Dhabi's regulated digital asset sector.
