Coinbase Launches Abu Dhabi Tokenization Hub After ADGM Regulatory Approval

The Financial Services Regulatory Authority of Abu Dhabi Global Market has granted Coinbase a Financial Services Permission, or FSP, allowing the company to arrange deals in investments and provide custody services connected with its planned tokenized-securities operations. The authorization provides the regulatory basis for Coinbase's international tokenization hub within ADGM, Abu Dhabi's international financial center.

The permission is specifically tied to regulated financial activities rather than representing unrestricted authorization for Coinbase's wider range of cryptocurrency services. The initial focus is facilitating the issuance and operation of tokenized securities, with Coinbase providing infrastructure around transactions and custody.

Tokenization involves representing rights to an underlying financial asset through blockchain-based tokens. In Coinbase's proposed model, securities issued in ADGM are backed by underlying shares rather than functioning as unbacked digital representations of a company's stock. The structure places the blockchain component within an existing securities-regulatory framework, rather than treating the tokens solely as virtual assets.

Shareholder Rights Come with Conditions

Coinbase said token holders will be able to receive economic and, in certain circumstances, shareholder rights associated with the underlying shares. The company's announcement describes rights including dividends and voting, although the accompanying legal disclosures place qualifications on how those rights operate.

Under the terms cited by Coinbase, only holders who satisfy defined vesting conditions may exercise certain rights, including voting rights connected with the underlying securities. Dividends are automatically reinvested, while both vested and unvested holders may receive the economic benefit of that reinvestment. Redemption rights are also limited to eligible vested holders under the applicable prospectus.

Those conditions create differences between holding a tokenized security and holding an ordinary share directly through a conventional brokerage account. Coinbase says transactions involving the digital securities themselves do not require users to establish a brokerage or bank account. However, its disclosure states that an eligible holder seeking to exercise certain redemption rights must have an appropriate brokerage or bank account capable of receiving the resulting proceeds.

Regulatory documentation also shows that the initiative has progressed beyond an initial announcement. ADGM's approved prospectuses register lists Coinbase Onchain SPV Ltd. as an issuer and records a primary prospectus approved on Aug. 4, 2026, for an NVIDIA-linked certificate under the ticker NVDAc. ADGM classifies the instrument as a "certificate over shares."

Abu Dhabi Builds on Earlier Coinbase Work

The latest authorization follows several years of interaction between Coinbase and Abu Dhabi's regulatory system. In December 2023, Coinbase Asset Management announced Project Diamond, an institutional platform designed for the creation and trading of blockchain-based financial assets. At the time, the project had received in-principle approval to enter ADGM's regulatory laboratory.

Project Diamond demonstrated an earlier version of Coinbase's effort to connect conventional financial instruments with blockchain settlement. Coinbase said the platform completed a transaction involving a digital debt instrument using USDC and Base, its Ethereum layer-2 network, as part of preparations for the ADGM regulatory sandbox. Coinbase's broader tokenization platform now describes infrastructure spanning asset issuance, lifecycle management, distribution, trading and settlement.

ADGM has been developing rules for blockchain-based financial activity for several years. Its digital asset regulatory framework covers virtual-asset activities and imposes requirements relating to areas including market surveillance, transaction monitoring, settlement and operational controls. ADGM first introduced its virtual-asset framework in 2018 and subsequently developed guidance addressing digital securities and other blockchain-based financial products.

Coinbase is positioning the Abu Dhabi operation alongside a separate derivatives business in Dubai as part of its wider UAE expansion. The company said the two operations will focus on different areas: Abu Dhabi on tokenized securities and onchain capital markets, and Dubai on derivatives.