Abu Dhabi’s tokenized-equity experiment has moved beyond putting individual U.S. stocks onchain. It is now testing whether investors can build ETF-like portfolios without owning an ETF at all.
Coinbase received Financial Services Permission from the Financial Services Regulatory Authority of Abu Dhabi Global Market on August 11, clearing it to arrange investments and provide custody for its tokenization business. The first products subsequently moved into operation, giving eligible investors access to tokenized U.S. equities backed by shares held in regulated custody.
Abu Dhabi is effectively developing two models for packaged investment exposure at the same time: ETFs listed on ADX and tokenized portfolios operating through ADGM’s digital-asset infrastructure.
From Tokenized Stocks to Tokenized Portfolios
The next step came on August 25, when Bitwise introduced Automated Token Portfolios, or ATPs, built using Coinbase’s ADGM-issued tokenized equities.
Rather than issuing shares in a pooled fund, Bitwise publishes portfolio methodologies that can be implemented and automatically rebalanced by Glider in investors’ self-custodied wallets. Its initial concepts include Mag7X, Robotics and AI Leaders.
The structure resembles an ETF in what it tries to accomplish, diversified exposure under a defined methodology, but the legal architecture is different. There is no ETF, pooled investment company or conventional exchange listing.
Abu Dhabi Is Developing Both Models
That distinction is particularly relevant because ADX has been building one of the GCC’s largest ETF markets.
The exchange had reached 24 listed ETFs by June 23, 2026, when Lunate’s GCC Shariah Dividend ETF joined the market. In April, ADX also hosted the region’s first initial offering period for a U.S.-based ETF before its cross-listing, with ETF market capitalization reaching nearly AED27 billion at the time.
Saudi Arabia is expanding the conventional model as well. The Saudi Exchange added the Al Rajhi MSCI Saudi Equity ETF in August, increasing the range of locally listed Shariah-compliant equity ETFs.
Tokenization now introduces another possible distribution channel for portfolio products without requiring the conventional fund wrapper.
A 0.15% Fee Does Not Mean a 0.15% Portfolio
Bitwise charges a 0.15% methodology fee for its ATP structure, but that figure should not be compared directly with an ETF expense ratio.
The Coinbase ADGM structure introduces costs at the underlying-security level. According to the prospectus terms, applicable U.S. dividends face 30% withholding unless reduced by treaty, while Coinbase charges 5% of gross dividends and distributions before reinvestment. Creation and redemption fees are 0.01% and 0.05%, respectively.
Investors can also face Glider charges, trading costs and rebalancing slippage. Bitwise states that its U.S. Securities and Exchange Commission investment-adviser registration does not extend regulatory protections to ATP users.
Ownership rights differ too. Token holders do not receive direct voting rights, while redemption and voting instructions depend on whether the holder has completed the process required to become “vested.” Redemptions can also be suspended or rejected for regulatory, sanctions or operational reasons.
An ETF Competitor Is Emerging Inside an ETF Hub
For GCC investors, the interesting development is therefore larger than tokenized Apple or Nvidia shares.
ADX offers the conventional route: regulated funds, exchange trading, market makers and familiar ETF infrastructure. ADGM’s tokenization framework is testing whether investors can instead hold the underlying portfolio components digitally and have software manage the allocation.
The two structures are unlikely to be economically identical once taxes, trading costs, liquidity and investor rights are included. Yet Abu Dhabi now has both developing within the same financial centre.
That makes the UAE an unusually important test market. Its ETF industry is expanding at the same time that ADGM is providing the infrastructure for products designed to reproduce some of an ETF’s portfolio-management functions without creating an ETF at all.
