Crypto exchange Coinbase has obtained a Financial Services Permission, or FSP, from the Financial Services Regulatory Authority of Abu Dhabi Global Market, known as ADGM. The license allows Coinbase to arrange investment transactions and provide custody for tokenized securities.
Coinbase described the approval as the regulatory foundation for its international tokenization hub. It also said the license is the first of its two main non-U.S. institutional businesses in the United Arab Emirates. The other is its derivatives business in Dubai.
Scope includes tokenized equities backed by underlying shares
Under the scope of the FSP, Coinbase can arrange and custody tokenized stocks that are fully backed by the underlying equities. The company said holders of these digital securities can receive economic exposure including dividends, while voting rights and redemption rights are subject to the vesting conditions set out in each prospectus.
Coinbase said investors would only need a crypto wallet to trade. Secondary transfers would not require a brokerage account or a correspondent banking relationship. Still, redeeming proceeds into fiat would require a bank account or a brokerage account.
What Coinbase and ADGM officials said
Brett Tejpaul, co-chief executive of Coinbase Institutional, said no major financial center currently has a framework that treats tokenized equities at once as securities, blockchain-native tokens and composable DeFi assets.
Arvind Ramamurthy, chief market development officer at ADGM, said the Coinbase hub reflects the center's progressive, robust and internationally aligned regulatory framework.
Regulatory background and jurisdiction limits
FSRA published its first virtual asset rules in 2018. According to the details provided, the related arrangements include sanctions screening as well as safeguards such as wallet-level freezing or seizure of assets.
The report also said ADGM applies English common law. FSRA's authority is separate from that of the UAE Securities and Commodities Authority, and registration in ADGM does not automatically grant passporting rights in other Gulf Cooperation Council jurisdictions.