Licensing Process

Definition ∞ The licensing process involves the formal procedure through which businesses acquire official permission from regulatory authorities to operate within a specific jurisdiction. For digital asset firms, this entails meeting predefined legal, financial, and operational requirements to ensure compliance and consumer protection. It typically includes submitting detailed applications, undergoing due diligence, and adhering to ongoing supervisory obligations. This process establishes legitimacy and operational boundaries for crypto entities.
Context ∞ The licensing process for digital asset service providers is a central point of regulatory discussion globally, as authorities strive to balance innovation with risk management. Jurisdictions are continuously refining their licensing regimes to cover a broader array of crypto activities, including exchanges, custody services, and stablecoin issuers. A critical future development involves harmonizing these disparate licensing requirements across different nations to facilitate international operations and reduce regulatory arbitrage.