Exchange Authorization

Definition ∞ Exchange Authorization refers to the official permission granted by regulatory bodies for a cryptocurrency exchange to operate within a specific jurisdiction. This authorization typically involves meeting stringent requirements related to capital adequacy, consumer protection, anti-money laundering (AML) protocols, and cybersecurity standards. It signifies that the exchange has undergone a vetting process and is deemed fit to offer digital asset trading services. The process ensures operational integrity and compliance with financial laws.
Context ∞ The key discussion surrounding exchange authorization involves the varied and evolving regulatory landscapes globally, creating differing requirements for digital asset platforms. Its situation highlights a fragmented regulatory environment where obtaining licenses can be complex and jurisdiction-specific. A critical future development to watch for is the potential for international cooperation to harmonize authorization standards, aiming to create a more consistent and predictable operating environment for cryptocurrency exchanges worldwide.