Capital Markets Convergence

Definition ∞ Capital markets convergence describes the increasing integration of traditional financial markets with digital asset markets. This trend signifies the blending of established investment systems, such as stock exchanges and bond markets, with nascent blockchain-based platforms for trading cryptocurrencies and tokenized assets. It involves the adoption of digital asset technologies by conventional financial institutions and the development of regulatory bridges between the two domains. This convergence seeks to combine the efficiency of digital systems with the stability and scale of traditional finance.
Context ∞ A key discussion point in capital markets convergence is the regulatory arbitrage that currently exists between different jurisdictions and asset classes. News often highlights efforts by global financial bodies to create a unified approach to digital asset oversight. Critical future developments include the widespread issuance of tokenized real-world assets and the establishment of interoperable infrastructure that seamlessly connects decentralized finance with conventional financial instruments.