- Coinbase has secured an FSRA license in Abu Dhabi from its financial regulator.
- The crypto exchange can arrange investment deals and offer custody services in the emirate.
- The company also plans to tokenize traditional assets like securities.
Coinbase has marked a major milestone in its vision to expand its global presence, securing a new regulatory approval in Abu Dhabi. The crypto exchange reportedly secured a license from the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM), which allows it to arrange investment deals and offer custody services in the emirate.
Coinbase Secures Abu Dhabi FSRA License
Crypto exchange Coinbase has received an FSRA license from Abu Dhabi’s ADGM. The company can now expand its regulated financial services in the region, including investment arrangements and custody services.
According to the crypto exchange’s statement, Coinbase is planning to turn ADGM into its international hub for tokenization outside the US. The company will work on bringing traditional financial assets onto blockchain networks through tokenization. With the help of the FSRA license, the exchange could allow traditional assets to be represented and transferred in digital form. In addition, Coinbase is also expected to issue tokenized securities linked to underlying shares.
Bringing Traditional Shares Onchain
Notably, Coinbase intends to make traditional assets easier to access via blockchain technology. While relying completely on traditional financial infrastructure, many may find it difficult to access them. Instead, if they are brought onchain, investors can hold tokenized securities directly in a compatible wallet.
Regarding its tokenization plans, Coinbase noted that each tokenized security will be linked to an underlying share. This allows eligible shareholders to receive benefits, including voting rights, depending on the corresponding conditions.
Coinbase further added that every transfer of these digital securities will go through sanctions screening to meet regulatory requirements. If required, the company may freeze or seize assets or wallets.
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It is worth noting that Coinbase’s decision to select Abu Dhabi for its tokenization push is not a random one. The emirate’s growing blockchain space and supportive regulatory environment have played a major role.
Abu Dhabi has been making major developments in the blockchain space over the past few years. The ADGM launched its virtual asset regulatory framework in 2018. This has created a favorable environment for crypto companies and exchanges to flourish in the land. Brett Tejpaul, the co-CEO of Coinbase Institutional, stated, “No major financial center has yet built a framework that treats tokenized equities simultaneously as securities, blockchain-native tokens, and DeFi-composable assets.”
The latest development within Coinbase builds on its existing connection with the UAE. The exchange has already been working on blockchain-based financial products in the country. The exchange’s asset management branch launched its Project Diamond in 2023 to help institutional investors issue and trade digital debt instruments using Base, the Ethereum Layer-2 network.
Related: Coinbase May Have Found a Business That Thrives Without a Crypto Bull Run
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