Definition ∞ Capital control refers to measures governments implement to regulate the flow of money into and out of a country. These restrictions aim to stabilize domestic currencies or economies. They can involve limitations on foreign exchange transactions, restrictions on asset purchases by non-residents, or taxes on cross-border financial movements.
Context ∞ Capital controls significantly influence the utility and adoption of digital assets, particularly in jurisdictions with strict financial regulations. Cryptocurrencies often present an alternative means of value transfer, potentially bypassing traditional control mechanisms. This creates an ongoing discussion between national authorities seeking financial sovereignty and proponents of open, borderless digital economies.
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