Coinbase has secured a Financial Services Permission (FSP) from the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM), clearing the US exchange to arrange deals in investments and provide custody in connection with tokenised securities. The licence is the regulatory foundation for what Coinbase describes as its international tokenisation hub, the first of two major non-US institutional businesses it is establishing in the UAE alongside a derivatives operation in Dubai.
The FSP covers the arrangement and custody of tokenised equities that are fully backed by underlying shares. Holders of the digital securities receive economic exposure to dividends, though voting and redemption rights are subject to vesting conditions set out in individual prospectuses. Coinbase says investors can transact using only a crypto wallet, with no brokerage account or correspondent banking relationship required for secondary transfers, though redemption of proceeds into fiat still requires a bank or brokerage account.
Brett Tejpaul, co-chief executive of Coinbase Institutional, framed the significance of the ADGM framework in structural rather than promotional terms: “No major financial centre has yet built a framework that treats tokenized equities simultaneously as securities, blockchain-native tokens, and DeFi-composable assets.”
Regulatory architecture
The ADGM framework is among the more mature virtual-asset regulatory environments in the Gulf. The FSRA published its initial virtual-asset rules in 2018, predating comparable frameworks in several larger jurisdictions. For Coinbase, the FSP matters because it provides a regulated on-ramp to issuing tokenised equities that carry the same investor protections as traditional securities, including sanctions screening and the ability to freeze or seize assets at the wallet level. That combination, compliant with standard AML and sanctions obligations while remaining composable on-chain, is the central technical and legal claim the product rests on.
The Gulf’s regulatory environment is relevant context for international investors. ADGM operates under English common law and is recognised as a financial centre with internationally aligned standards. The FSRA’s remit is distinct from the UAE’s onshore Securities and Commodities Authority, and ADGM-registered entities are not automatically passported into other Gulf Cooperation Council jurisdictions. Arvind Ramamurthy, chief market development officer at ADGM, said the Coinbase hub reflects the strength of the centre’s “progressive, robust and internationally aligned regulatory framework.”
Market context
Tokenised securities have attracted sustained institutional interest globally, with asset managers, custodians and exchanges exploring the infrastructure required to put real-world assets on-chain at scale. BlackRock’s tokenised money market fund on Ethereum, Franklin Templeton’s on-chain fund and several bank-led bond issuances have demonstrated regulatory appetite in the US and Europe. ADGM and VARA in Dubai are competing to position the UAE as the primary Gulf hub for this infrastructure layer, and the Coinbase licence is a meaningful signal of where one of the world’s largest crypto exchanges believes the regulatory conditions are most workable.
The commercial question is liquidity and distribution. Tokenised equity products require secondary market depth to be useful beyond niche early adopters, and that depth depends on whether institutional custodians, market makers and retail wallet providers connect to the same rails. Coinbase’s existing retail and institutional distribution is an asset, but the product’s reach will be determined as much by which jurisdictions allow their residents to hold ADGM-issued digital securities as by the technical architecture itself.
The next concrete milestones to watch are the first named tokenised securities issued under the FSP, the identity of anchor institutional investors or issuers, and any reciprocal licensing or recognition arrangements that extend distribution beyond the UAE.
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