Coinbase just secured a license from the Abu Dhabi Financial Services Regulatory Authority to build an international tokenisation hub. This clears the way to issue tokenised US stocks with shareholder rights, dividends, and voting — all accessible via a crypto wallet. To talk about this is John D'Agostino, Head of Strategy at Coinbase Institutional. Welcome, John.
Hi, Lucy. Thanks for having me.
What exactly is this approval for and what is the appeal of Abu Dhabi for Coinbase?
The UAE in general and Abu Dhabi around these efforts has been really optimising itself to be the focal point for all of this activity. This is actually the second exchange I have had the fortune of working with to bring to the UAE. And over the last 20 years you have seen the ability for regulators there to be ahead of the curve in putting clear policy together — the FSRA published digital asset guidance as early as 2018. From a company's perspective, you are looking for a geographic region the rest of the world can paper to quite easily — credible, respected, good internal capital markets, good banking infrastructure, clear regulatory guidelines. And you want a regulator that is progressive and easy to work with while also maintaining international credibility standards. Not many regions in the world check all of those boxes. The UAE is one of them. And the FSRA, while being a very tough regulator, is comfortable putting pen to paper to write very clear rules — and when you are doing something new, they are willing to sit down and within the ruleset come up with a solution that works.
Is Coinbase now doing for equities what stablecoins did for US dollars?
It is a useful analogy. Stablecoins took really high quality assets like US treasuries and monetised them — made them simple to transact, 24/7, 365, with anyone with a phone and a digital asset wallet. That has been enormously successful. Tokenisation is a very similar concept. You take high quality assets — the first stock we tokenised out of the UAE is Nvidia — and you create a scenario where anyone in the world can participate in that ecosystem. It is good for the user. There is tremendous latent demand for extremely high quality assets like top US equity market stocks and US treasuries. It is also good for issuers and existing shareholders because it opens up an enormous pool of liquidity. We are talking about anywhere between three and a half and four billion people who are currently shut out of brokerage infrastructure who now have the ability to participate in true economic ownership.
What exactly is a world first about this license?
We are now authorised to control, custody, and transact in dealmaking in the UAE. For the first time you have a tokenised product that is true ownership. Every single token is 1-to-1 backed by the underlying equity. That equity is custodied in region within an FSRA-registered and authorised custodian. The token is issued through an entity in the UAE and through authorised participants that are fully AML and KYC compliant. That token can then bridge into the DeFi landscape — so anyone in the world can get that economic ownership. We are able to mathematically produce and send out dividends by adjusting the NAV. And through the authorised participant, there will be an ability to vote on those shares. Most attempts at tokenisation have had to abstract out one or more of those control mechanisms. Here, all of them are intact — and that is the first time that has happened.
Finally — Coinbase has its tokenisation hub in Abu Dhabi and its global derivatives business in Dubai. What does that say about the UAE?
For the last 20 years, the UAE has fought very hard to position itself as the definitive non-US ecosystem centre, at least from a US company perspective. If you think about what you are looking for — you want a place with the highest probability of being able to transact credibly, with strong banking infrastructure and tremendous capital flowing in and out. And then critically — consistency. The probability that the regulatory environment you are acting in today will be very similar to the one you are acting in at five, ten, fifteen, or twenty years in the UAE is extremely high. That is what makes this a no-brainer as our primary offshore centre.
That is a perfect way to end. John, thank you so much for joining us today.
Thank you, Lucy.
