Definition ∞ A digital currency framework constitutes the comprehensive set of rules, technologies, and governance structures that define how a digital currency operates. This framework covers aspects such as issuance, transaction processing, security protocols, and regulatory compliance. It establishes the foundational principles and operational guidelines for a digital medium of exchange. This structure ensures the integrity and functionality of the currency.
Context ∞ The development of a robust digital currency framework is a central focus for central banks and governments considering the issuance of Central Bank Digital Currencies. News often reports on various countries piloting or researching different framework models, addressing issues like privacy, interoperability, and financial stability. Debates revolve around the optimal design choices that balance innovation with risk mitigation, particularly concerning the potential impact on existing financial systems. Establishing a clear and adaptable framework is vital for the successful integration of digital currencies into the global economy.
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