Coinbase Wins ADGM Licence to Build Tokenised Securities Hub
Coinbase has secured a Financial Services Permission (FSP) from Abu Dhabi Global Market's (ADGM) Financial Services Regulatory Authority (FSRA), allowing it to arrange deals in tokenized securities and provide custody services. This license is the foundation for Coinbase's international tokenization hub, one 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 tokenized equities that are fully backed by underlying shares. Holders of these digital securities receive economic exposure to dividends, but voting and redemption rights are subject to vesting conditions outlined in individual prospectuses.
According to Brett Tejpaul, co-CEO of Coinbase Institutional, the ADGM framework is significant because it treats tokenized equities simultaneously as securities, blockchain-native tokens, and DeFi-composable assets. The framework provides a regulated on-ramp for issuing tokenized equities that carry the same investor protections as traditional securities.
The UAE's regulatory environment is relevant context for international investors, with ADGM operating under English common law and being recognized 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, stated that the Coinbase hub reflects the strength of the centre's 'progressive, robust and internationally aligned regulatory framework.' The license is a significant signal of where one of the world's largest crypto exchanges believes the regulatory conditions are most workable.