Central Bank Regulation

Definition ∞ Central bank regulation refers to the rules and oversight imposed by a nation’s monetary authority on financial institutions. These measures aim to preserve financial stability, manage monetary policy, and protect consumers within the traditional financial system. In the digital asset sphere, such regulation addresses risks like money laundering, terrorist financing, and market manipulation. It also seeks to integrate digital currencies into existing frameworks while mitigating systemic vulnerabilities.
Context ∞ The discussion surrounding central bank regulation in crypto currently focuses on how existing mandates apply to decentralized systems. Regulators are assessing the appropriate scope for digital asset oversight, considering issues of jurisdictional reach and technological innovation. A critical future development involves the potential issuance of central bank digital currencies and their impact on private digital assets.