How Coinbase Is Building Its Abu Dhabi Tokenisation Hub
Coinbase has won a Financial Services Permission from the Financial Services Regulatory Authority of Abu Dhabi Global Market, the UAE capital's international financial centre. The approval lets the US-based exchange arrange investment deals and provide custody services in ADGM, creating the foundation for an international tokenisation hub.
The licence covers tokenised securities registered and issued in ADGM. Those assets are fully backed by underlying shares, supervised by the FSRA, and give token holders full shareholder rights such as dividends and voting. Instead of needing a brokerage account or correspondent banking relationship, an investor would need only a digital wallet.
Coinbase said the move is the most significant step it has taken toward opening global capital markets to around four billion people it says cannot currently access them. Every transfer will face ongoing sanctions screening, and Coinbase can freeze or seize assets at the wallet level where required.
Brett Tejpaul, Co-CEO of Coinbase Institutional, said ADGM's 2018 virtual-asset framework was an early example of innovation-forward regulation, while ADGM's Chief Market Development Officer Arvind Ramamurthy described the hub as an endorsement of Abu Dhabi's role in global finance. Coinbase is pairing the Abu Dhabi tokenisation business with a global derivatives hub in Dubai.
What the ADGM Licence Unlocks for Tokenised Securities
Why Abu Dhabi Bet on Tokenised Equities Early
ADGM issued one of the world's first virtual-asset regulatory frameworks in 2018 and is now positioning itself as a venue that treats tokenised equities simultaneously as securities, blockchain-native tokens and DeFi-composable assets. That framing matters: it allows a regulated securities wrapper to interact with blockchain infrastructure rather than keeping the two worlds separate.
The Real Friction Being Removed
The model Coinbase describes removes two familiar entry points: the brokerage account and the correspondent banking relationship. For investors in markets where those services are expensive or scarce, a wallet-based route could lower the cost of holding tokenised shares. It does not eliminate risk—investors still rely on the FSRA's supervision and Coinbase's custody controls—but it changes which infrastructure is required.
Compliance and Control Are Built Into the Product
The licence comes with hard obligations. Transfers are subject to ongoing sanctions screening, and Coinbase retains the ability to freeze or seize assets at the wallet level when required. That is a deliberate effort to prevent tokenised markets from being treated as unregulated parallel finance, but it also concentrates significant operational control in the licensed platform.
What This Signals for the UAE
Coinbase is now building two of its largest non-US businesses in the UAE: an Abu Dhabi hub for tokenised securities and onchain capital markets, and a Dubai hub for derivatives. The pattern is one the UAE has been courting—using regulatory clarity to attract global crypto and fintech firms that want a compliant home for new financial infrastructure.
Next Moves for Issuers, Investors and Compliance Teams
- For issuers: Evaluate the ADGM framework if you are considering tokenised equity or debt; the FSRA permission covers arranging investment deals and custody, but disclosures and ongoing supervision will still shape time-to-market.
- For institutional investors: The model means tokenised securities can carry dividend and voting rights and can be held via wallet rather than brokerage account; ask whether this changes custody, settlement or reporting requirements for your compliance stack.
- For compliance teams: Build sanctions screening and wallet-level freeze/seizure mechanics into any integration plan, because Coinbase's ADGM operation is explicitly designed to enforce them.
- For competitors and other financial centres: Watch whether ADGM's combined securities/blockchain/DeFi treatment produces concrete tokenised issuances—not just licences—as the benchmark for credible tokenisation policy.
Risk & Opportunity Assessment
| Commercial Risk | Medium | The licence is newly issued and revenue depends on adoption of tokenised securities by issuers and investors; no issuance volumes or pipeline are yet public. |
| Competitive Risk | Medium | ADGM's framework is an early-mover advantage, but other financial centres and exchanges can replicate or counter with their own regimes; Coinbase also runs a separate Dubai derivatives hub that may compete for internal capital. |
| Regulatory Risk | Medium | The FSP requires ongoing sanctions screening and allows Coinbase to freeze or seize assets at wallet level; future FSRA rule changes could alter custody, listing or DeFi permissions. |
| Reputation Risk | Medium | Coinbase is making broad claims about opening markets to four billion people; any custody failure, enforcement action or user asset-freeze dispute would test that narrative. |
| Technology Disruption | High | Wallet-based access removes brokerage and correspondent banking requirements for token holders, a direct infrastructure shift for investors who can use compliant tokenised securities. |
| Commercial Opportunity | High | Coinbase now has regulatory cover for tokenised securities in Abu Dhabi alongside a Dubai derivatives business, giving it two non-US footholds in regulated digital-asset markets. |
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