According to ChainCatcher news, crypto trading platform Coinbase has obtained a financial services license (FSP) from the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM). The license allows it to arrange investment transactions and provide custody in respect of tokenized securities. Coinbase described the license as the regulatory foundation for its international tokenization hub and the first of two major non-U.S. institutional operations it will establish in the UAE, the other being a derivatives business in Dubai.
Under the scope of the license, the FSP covers the arrangement and custody of tokenized shares fully backed by the underlying shares. Holders of digital securities may receive economic exposure such as dividends, and voting rights and redemption rights are subject to vesting conditions in each prospectus. Investors only need a crypto wallet to trade, and secondary transfers do not require a brokerage account or correspondent banking relationship, but redeeming proceeds into fiat still requires a bank or brokerage account, Coinbase said.
Brett Tejpaul, Co-CEO of Coinbase Institutional: No major financial center has yet established a framework that simultaneously treats tokenized stocks 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. The FSRA published its first virtual asset rules in 2018, with arrangements including sanctions screening and protections such as freezing or seizing assets at the wallet level. ADGM is governed by English common law, the FSRA has a different mandate than the UAE Securities and Commodities Authority, and registered entities do not automatically gain a pass in other GCC jurisdictions.