Central Banks

Definition ∞ Central banks are national financial institutions responsible for a country’s monetary policy and financial stability. These entities manage currency supply, set interest rates, oversee commercial banks, and often act as lenders of last resort, exerting substantial influence over economic conditions. In the digital asset space, central banks are increasingly relevant through their exploration of central bank digital currencies (CBDCs) and their role in establishing regulatory frameworks for cryptocurrencies. Their decisions can significantly affect the broader financial landscape.
Context ∞ Central banks globally are actively assessing the implications of digital assets for financial stability, payment systems, and monetary sovereignty. Key discussions involve how to regulate cryptocurrencies effectively, whether to issue CBDCs, and the potential for digital assets to disrupt traditional banking structures. The ongoing efforts by central banks to adapt to this new financial paradigm will shape the future interaction between sovereign money and decentralized digital systems.