Coinbase has won regulatory approval in Abu Dhabi to arrange investment deals and provide custody for tokenized securities backed by underlying shares. The permission builds on Coinbase's existing Project Diamond infrastructure in the emirate.
Abu Dhabi's Financial Services Regulatory Authority has granted Coinbase a Financial Services Permission to arrange deals in investments and provide custody for a planned tokenized securities business. The exchange now sits inside ADGM's regulated financial system as it builds infrastructure for issuing traditional assets on blockchain networks.
The securities issued through the framework will be backed by underlying shares and supervised by the FSRA. Verified holders receive economic rights tied to the assets, while shareholder rights such as voting depend on vesting conditions attached to the digital securities. Investors can hold the products in digital wallets without opening a brokerage account, though transfers stay subject to sanctions screening, with assets capable of being frozen or seized at the wallet level when required.
Project Diamond laid the groundwork
Abu Dhabi was already part of Coinbase's institutional tokenization plans before the latest license. The exchange launched Project Diamond as a platform for issuing blockchain-based financial instruments, starting with digital debt products for institutional users, and the platform received in-principle approval from ADGM regulators before issuing its first debt instrument, a short-term discount note denominated in USDC on Coinbase's Base blockchain.
In December 2024, Project Diamond integrated Chainlink's Cross-Chain Interoperability Protocol, giving institutions cross-chain connectivity and verifiable data for tokenized assets, with Peregrine named as its flagship user. The new permission moves Coinbase from institutional debt infrastructure toward a structure that can support tokenized securities backed by shares.
Other firms have already moved into ADGM
Coinbase is entering a market where other companies hold similar permissions. In March, Ondo Finance received approval for tokenized U.S. stocks and ETFs within ADGM, with equity-linked notes providing exposure to Amazon, Apple, Microsoft and Tesla. BNY launched Bitcoin and Ether custody in ADGM in May, holding $59.4 trillion in assets under custody when the service was announced. Coinbase itself already offers tokenized equities elsewhere: in June it launched tokenized shares linked to SpaceX, Nvidia, Google, Strategy and Bitmine, backed 1:1.
Gulf tokenization market could near $500 billion
Consulting firm Kearney and tokenization infrastructure company Ctrl Alt estimated earlier this year that tokenized real-world assets across the Gulf Cooperation Council could approach $500 billion by 2030, with commodities alone representing about $14 billion of that market. Abu Dhabi-based KAIO added to the sector's momentum in April, raising $8 million from investors including Tether and managing about $100 million in on-chain assets at the time.
Source: crypto.news
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