Coinbase to buy token tied to Abu Dhabi-backed Mubadala fund
Mubadala Capital, Coinbase and KAIO are creating a regulated blockchain token for qualified investors in a private markets fund.
By Maya Lindqvist · Senior Technology Correspondent
3 min read
Mubadala Capital said Thursday it has partnered with Coinbase and KAIO to create a regulated tokenized version of its evergreen private markets fund for qualified investors. The deal brings an Abu Dhabi-backed investment manager into the growing market for blockchain versions of traditional financial assets.
Coinbase will use its Base blockchain as one of the networks supporting the token, according to the companies. The exchange will also purchase the token, placing an investment tied to Mubadala’s fund on Coinbase’s own balance sheet.
The partners said the move marks the first instance of a major publicly traded U.S. company using regulated tokenized assets for native on-chain treasury management. KAIO will provide the infrastructure needed to issue the fund as a compliant digital token that eligible investors can hold.
Expanding access to a private fund
Mubadala Capital is linked to one of Abu Dhabi’s largest state-owned investment funds, which Fortune reported has nearly $400 billion in assets under management. The tokenized product is intended to widen the group of potential investors beyond the large private-equity buyers that have typically dominated access to such funds.
Shrey Rastogi, KAIO’s chief executive, told Fortune that these private-market investments are often difficult for retail investors, and even many individual investors, to reach without a relationship with a major private bank.
Mubadala’s long-running fund invests in company stakes and loans that do not trade on public exchanges, according to Fortune. The new tokenized version will be distributed on Coinbase’s Base network, as well as the Solana and Sui blockchains.
KAIO works with protocol treasuries, asset managers and family offices, according to Fortune. The infrastructure company already supports tokenized funds from BlackRock, Brevan Howard, Hamilton Lane and Laser Digital, and is presenting the Mubadala arrangement as its main sovereign-wealth partnership.
KAIO’s tokenization plan for the Mubadala fund has attracted about $75 million from a mix of traditional and crypto-native allocators, Fortune reported. Investors seeking access must use a licensed fund administrator, complete off-chain onboarding and receive an on-chain profile that determines which products they can view and subscribe to.
Tokenized assets gain ground
Tokenization refers to representing assets such as stocks or private funds as digital tokens on a blockchain. Venture firm a16z crypto reported that the market value of tokenized stocks rose about 400% over the past year to roughly $1.7 billion at the end of June.
The same a16z crypto report said tokenized assets have expanded beyond crypto-linked products into a broader range of U.S. equities, including exchange-traded funds and AI-related stocks. Fortune reported that Coinbase, Robinhood, Binance and Intercontinental Exchange, the parent of the New York Stock Exchange, have all started tokenization initiatives.
Until the Mubadala deal, Fortune reported, much of the activity had centered on brokers and trading platforms rather than sovereign wealth funds. The new product places a state-backed private markets fund into that same blockchain-based distribution model, with access limited to qualified investors.
This story draws on original reporting from Fortune.