Coinbase Secures Abu Dhabi Approval for Tokenized Securities Hub

Coinbase has secured regulatory approval from the Financial Services Regulatory Authority (FSRA) in Abu Dhabi to build a hub for tokenized securities and on-chain capital markets. The company received Financial Services Permission, allowing it to arrange investment deals and provide custody services for its planned tokenized securities business.

The move marks a significant step for Coinbase's international expansion, with the goal of bringing traditional financial assets onto blockchain networks. Tokenization could make capital markets more accessible to people worldwide who currently face high costs and limited access to traditional financial services. Around 4 billion people globally fall into this category, according to Coinbase.

The company plans to issue digital securities backed by underlying shares, with token holders able to receive shareholder rights such as dividends and voting rights. However, some rights may be subject to vesting conditions, which require certain criteria to be met before they can be exercised. The approach is designed to bring traditional securities onto blockchain networks while maintaining regulatory oversight.

Coinbase's model also includes ongoing sanctions screening for transfers and the ability to freeze or seize assets at the wallet level if required by law. This ensures that tokenized securities operate within a regulated framework, similar to traditional financial markets.