Mandatory Licensing Regime

Definition ∞ A Mandatory Licensing Regime requires all entities operating certain types of businesses or providing specific services to obtain a license from a regulatory authority. In the digital asset sector, this regime mandates that crypto-asset service providers secure official approval before offering services like exchanges, custody, or transfers. Its purpose is to ensure compliance with legal and financial standards.
Context ∞ Mandatory Licensing Regimes are becoming a standard approach for jurisdictions aiming to regulate the digital asset industry and mitigate risks. A critical discussion involves the scope of activities covered by these regimes and the burden they place on smaller or decentralized entities. Future developments will likely see increased international alignment on licensing standards to create a more consistent global regulatory landscape for crypto services.