Financed Transactions

Definition ∞ Financed transactions are commercial exchanges where a portion or the entirety of the purchase price is covered by borrowed capital rather than immediate cash payment. This involves a lender providing funds to the buyer, who then repays the loan over time, typically with interest. Examples include mortgages, auto loans, and business credit lines. These arrangements facilitate larger acquisitions and capital expenditures.
Context ∞ Within digital asset markets, financed transactions can involve borrowing stablecoins or fiat currency against cryptocurrency collateral to fund further investments or cover operational costs. The regulatory treatment of such leveraged positions, particularly concerning margin requirements and liquidation protocols, is a developing area. These transactions carry heightened risk due to cryptocurrency price volatility and potential for rapid margin calls.