Market formalization describes the process by which an unregulated or informally structured market transitions into a regulated and officially recognized system. This involves establishing clear rules, legal frameworks, and oversight mechanisms for trading, asset issuance, and participant conduct. The aim is to increase transparency, protect investors, and reduce systemic risks. Formalization often attracts broader institutional participation.
Context
Market formalization is a dominant theme in cryptocurrency news, as global regulators strive to integrate digital assets into existing financial frameworks. This includes efforts to classify various tokens, license crypto exchanges, and implement robust anti-money laundering (AML) and Know Your Customer (KYC) standards. The ongoing push for market formalization seeks to bring stability and legitimacy to the digital asset sector. These regulatory actions are critical for the long-term growth and acceptance of crypto.
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