Capital Standards

Definition ∞ Capital Standards are regulatory requirements dictating the minimum amount of capital financial institutions must hold. They ensure entities possess sufficient financial buffers to absorb potential losses and maintain stability. In the digital asset space, these standards aim to mitigate risks associated with volatile crypto holdings and operational exposures. Such requirements help protect depositors and market integrity.
Context ∞ Crypto news frequently reports on proposals and implementations of capital standards for digital asset service providers, including exchanges and custodians. A significant discussion involves adapting traditional financial regulations, like those from Basel Accords, to the unique risk profiles of cryptocurrencies. Regulators worldwide are working to establish appropriate frameworks to manage systemic risk in the evolving digital economy.