Licensing Requirement

Definition ∞ A licensing requirement mandates that entities offering specific services obtain official authorization from a regulatory body before operating. In the digital asset sector, this applies to cryptocurrency exchanges, custodians, and other service providers. These licenses typically impose conditions related to capital, security, and anti-money laundering compliance.
Context ∞ News often reports on new or updated licensing requirements as jurisdictions worldwide seek to regulate the digital asset industry. Compliance with these regulations is a significant operational challenge and cost for crypto businesses. The stringency of licensing can influence market entry and the availability of services in different regions.