Financial Instruments

Definition ∞ Contracts or assets that derive their value from an underlying asset or group of assets. These instruments can include derivatives, securities, and other forms of value representation that facilitate financial transactions. They are designed to transfer risk or provide leverage, playing a significant role in capital markets.
Context ∞ The classification and regulation of digital assets as financial instruments are subjects of intense scrutiny by global authorities. Understanding how these instruments function within existing legal frameworks is crucial for market participants. News regarding the introduction or prohibition of specific digital financial instruments often signals shifts in regulatory posture and market sentiment.