Coinbase has received a Financial Services Permission from the Financial Services Regulatory Authority of Abu Dhabi Global Market to build what it calls its international tokenization hub, clearing the exchange to arrange deals in investments and provide custody ahead of a launch of tokenized securities.
Tokenized securities registered and issued in ADGM will be backed by the underlying shares under FSRA supervision, and verified token holders will receive shareholder rights including dividends and voting, Coinbase said. Investors will need a wallet rather than a brokerage account or a correspondent banking relationship. Every transfer is subject to ongoing sanctions screening, and Coinbase said it can freeze or seize assets at the wallet level where required.
The company first described the product in June, saying tokens backed 1:1 by the underlying shares would be available only in eligible jurisdictions outside the United States.
"ADGM issued one of the world's first regulatory frameworks for virtual assets in 2018. That reflected a genuine institutional commitment to innovation-forward regulation, executed with the rigor that global financial markets require. No major financial center has yet built a framework that treats tokenized equities simultaneously as securities, blockchain-native tokens, and DeFi-composable assets," said Brett Tejpaul, Co-CEO of Coinbase Institutional.
