Coinbase launches Abu Dhabi tokenization hub after regulatory approval
- Coinbase has secured a Financial Services Permission from the UAE’s regulator, FSRA.
- The license allows Coinbase to offer custody services and operationalize tokenized securities.
- Coinbase’s Abu Dhabi tokenization hub seeks inclusivity across global capital markets.
Coinbase (COIN), a top US-based cryptocurrency exchange, announced Tuesday it has secured a Financial Services Permission (FSP) from the Financial Services Regulatory Authority (FSRA) in the United Arab Emirates (UAE). This milestone accelerates Coinbase’s ambition to bridge over 4 billion people to global capital markets through tokenization.
Coinbase eyes tokenization hub in Abu Dhabi
Coinbase is set to establish an international tokenization hub in the Abu Dhabi Global Market (ADGM) Square after securing an FSP license from the UAE’s financial watchdog, FSRA.
“This is the most significant step we have taken yet toward building the infrastructure for a more open, more accessible global financial system,” Coinbase said in the press release.
The license allows Coinbase to conduct investment deals and offer custody services. The development is an integral part of the company’s tokenized securities goals in Abu Dhabi.
Tokenized securities registered and issued within ADGM are fully collateralized by underlying shares and overseen by the FSRA. Verified token holders are granted comprehensive shareholder rights, including entitlement to dividends and voting privileges.
Investors can participate seamlessly without the need for a traditional brokerage account or correspondent banking relationship. With tokenized securities, only a digital wallet is required.
Each transaction undergoes continuous sanctions screening, and assets can be frozen or seized at the wallet level if necessary, ensuring decentralized finance (DeFi) access aligns with robust regulatory compliance.
“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,” Brett Tejpaul, Co-CEO of Coinbase Institutional, said.
In addition to the tokenized securities and on-chain capital hub, Coinbase plans to establish a global center for derivatives as part of the company’s broader commitment to the UAE.
Cryptocurrency prices FAQs
Token launches influence demand and adoption among market participants. Listings on crypto exchanges deepen the liquidity for an asset and add new participants to an asset’s network. This is typically bullish for a digital asset.
A hack is an event in which an attacker captures a large volume of the asset from a DeFi bridge or hot wallet of an exchange or any other crypto platform via exploits, bugs or other methods. The exploiter then transfers these tokens out of the exchange platforms to ultimately sell or swap the assets for other cryptocurrencies or stablecoins. Such events often involve an en masse panic triggering a sell-off in the affected assets.
Macroeconomic events like the US Federal Reserve’s decision on interest rates influence crypto assets mainly through the direct impact they have on the US Dollar. An increase in interest rate typically negatively influences Bitcoin and altcoin prices, and vice versa. If the US Dollar index declines, risk assets and associated leverage for trading gets cheaper, in turn driving crypto prices higher.
Halvings are typically considered bullish events as they slash the block reward in half for miners, constricting the supply of the asset. At consistent demand if the supply reduces, the asset’s price climbs.
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