A licensing regime is a system where specific businesses must obtain official authorization to operate legally. In financial services, particularly for digital assets, this involves meeting regulatory requirements related to capital adequacy, consumer protection, anti-money laundering controls, and operational integrity. Entities such as crypto exchanges, custodians, and payment providers are often subject to such regimes to ensure compliance and market stability. The objective is to safeguard investors and maintain trust in the financial system.
Context
The implementation of comprehensive licensing regimes for digital asset service providers, such as the EU’s MiCA regulation, is a primary focus for regulators globally. This aims to bring previously unregulated entities under formal oversight, addressing concerns about market manipulation and financial crime. Businesses in the digital asset sector must carefully monitor and adapt to evolving licensing requirements to maintain operational legality.
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