Coinbase's Tokenization Hub: A Game-Changer for Traditional Securities?

Web3 & BlockchainInvestment & Financial Markets

In a move that's set to disrupt the traditional finance industry, Coinbase has established a tokenization hub in Abu Dhabi, securing regulatory approval to offer tokenized securities.

TL;DR
• Coinbase has established a tokenization hub in Abu Dhabi, securing regulatory approval to offer tokenized securities.
• The hub will allow Coinbase to issue and register digital securities backed by underlying shares.
• This move is expected to have a significant impact on the global tokenization market.

Summary
Coinbase has secured a Financial Services Permission from Abu Dhabi Global Market’s regulator, establishing a tokenization hub that enables the exchange to issue and custody digital securities backed by underlying shares under local oversight. This move positions the firm to bring traditional securities onto blockchain platforms outside the United States.
• Regulatory approval allows Coinbase to arrange investment deals and custody tokenized securities in Abu Dhabi.
• The company plans to register and issue digital securities as securities, blockchain-native tokens, and DeFi‑composable assets.
• Abu Dhabi’s framework treats tokenized equities uniquely, supporting simultaneous compliance with securities, token, and DeFi standards.

Coinbase’s Abu Dhabi operation complements its existing derivatives business in Dubai, creating a dual presence in the UAE that supports expansion of tokenized asset offerings. The firm’s earlier Project Diamond initiative enabled institutional investors to issue and trade digital debt on its Ethereum‑based Base network, demonstrating a track record of deploying tokenization solutions.

The launch follows Abu Dhabi’s 2018 regulatory framework for virtual assets, which has attracted crypto and tokenization firms seeking a regulated base in the region. By aligning with local oversight, Coinbase can offer near‑instant settlement and 24/7 transferability for securities, potentially using them as collateral in on‑chain markets.

Mubadala Capital’s recent tokenization of a private‑market investment strategy through KAIO and Base, with Coinbase exposure, illustrates the emirate’s growing ecosystem for blockchain‑enabled finance. This partnership showcases how sovereign wealth funds can leverage tokenization to enhance liquidity and transparency.

Overall, Coinbase’s Abu Dhabi hub signals a strategic push to embed traditional finance within blockchain infrastructure, ensuring compliance, transparency, and long‑term scalability for tokenized assets across the Middle East.

As the world of finance continues to evolve, it's clear that tokenization is here to stay. Will Coinbase's new hub be a game-changer for traditional securities, or will it face significant challenges along the way?