Definition ∞ Capital Markets Digitalization refers to the process of converting traditional financial market operations and assets into digital formats. This transformation involves using technologies such as blockchain for issuance, trading, and settlement of securities. It aims to increase efficiency, reduce costs, and broaden access to financial instruments. The movement toward digital capital markets influences how assets are created and exchanged.
Context ∞ The ongoing digitalization of capital markets presents both opportunities and challenges for traditional finance and crypto assets. This shift involves tokenization of real-world assets and the creation of new digital securities. Regulators are currently grappling with how to oversee these evolving digital structures while maintaining market stability and investor protection.