Capital Controls

Definition ∞ Capital controls represent government-imposed restrictions on the cross-border movement of funds. These measures aim to stabilize a nation’s currency, manage foreign exchange reserves, or curb speculative financial activity. They often restrict the conversion of domestic currency to foreign currency or limit investments abroad. Such regulations can significantly influence the liquidity and accessibility of traditional financial markets.
Context ∞ In crypto news, capital controls are frequently discussed as a driver for digital asset adoption, particularly in jurisdictions with strict financial regulations. Individuals and entities sometimes turn to cryptocurrencies to circumvent these governmental restrictions on money transfers. The imposition or relaxation of capital controls in major economies can impact global crypto trading volumes and asset valuations. This interplay highlights digital assets as alternative conduits for value transfer when conventional systems are constrained.