A digital finance framework comprises the regulatory, technological, and operational structures supporting digital financial activities. This framework addresses the rules, standards, and systems governing digital assets, blockchain networks, and decentralized finance protocols. It seeks to balance innovation with consumer protection, market stability, and anti-money laundering efforts. The scope often includes licensing requirements for digital asset service providers and guidelines for stablecoin issuance. It aims to establish a secure and efficient environment for digital economic transactions.
Context
Discussions surrounding digital finance frameworks are central to policy debates and legislative efforts worldwide. The main challenge involves adapting existing financial regulations to novel digital asset structures and activities. A critical future development is the creation of harmonized international standards to prevent regulatory arbitrage and foster global digital asset markets. This area directly influences the growth and acceptance of digital assets within traditional finance.
The two-year tokenized sterling pilot integrates commercial bank money onto DLT, accelerating T+0 settlement and mitigating systemic counterparty risk across three key financial verticals.
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