Definition ∞ Capital Liquidity Requirements are regulatory provisions stipulating that financial institutions must maintain a specific amount of readily convertible assets. These requirements ensure an entity can meet its short-term financial obligations. For digital asset firms, this often applies to stablecoin issuers and centralized exchanges. They aim to protect consumers and maintain market stability.
Context ∞ Global financial regulators are increasingly focused on implementing robust capital liquidity requirements for entities operating within the digital asset space, particularly stablecoin providers. This regulatory push seeks to mitigate systemic risk and bolster investor confidence following periods of market instability. Adherence to these standards is a critical factor for the long-term viability of digital asset services.
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