Minimum Capital Requirements

Definition ∞ Minimum capital requirements are regulatory mandates specifying the lowest amount of liquid capital a financial institution, including crypto exchanges or custodians, must hold. These requirements aim to ensure solvency and protect consumer funds during adverse market conditions. They serve as a safeguard against financial instability.
Context ∞ Regulators globally are increasingly proposing and implementing minimum capital requirements for digital asset service providers to enhance market stability and consumer protection. Compliance with these rules can significantly affect operational costs and business models for crypto firms. The debate centers on balancing stringent financial oversight with fostering innovation in the digital asset space.