Definition ∞ Dual supervision refers to a regulatory arrangement where two separate authorities oversee the same entity or activity. This framework is often applied in financial sectors where entities operate across different jurisdictions or deal with varied asset types, requiring oversight from multiple agencies. In the context of digital assets, it might involve both a banking regulator and a securities commission having jurisdiction over a crypto firm. Such a structure aims to ensure comprehensive compliance and mitigate systemic risks.
Context ∞ The concept of dual supervision is becoming increasingly pertinent as traditional financial institutions enter the digital asset space and as crypto firms seek broader regulatory acceptance. Debates concern jurisdictional clarity, potential for overlapping requirements, and the coordination needed between supervisory bodies to avoid regulatory arbitrage. Harmonizing these oversight roles is a critical challenge for effective digital asset regulation.
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