Payment Institution

Definition ∞ A payment institution is a regulated entity authorized to provide payment services, such as executing payment transactions, issuing payment instruments, or acquiring payment orders. These institutions operate under specific licenses and are subject to regulatory oversight to ensure consumer protection and financial stability. In many jurisdictions, cryptocurrency exchanges or wallet providers offering fiat-to-crypto services may be classified as payment institutions. They facilitate the movement of funds.
Context ∞ The classification and regulation of digital asset businesses as payment institutions is a key topic in financial news, as regulators seek to apply existing frameworks to the evolving crypto landscape. This classification often imposes strict compliance requirements, including anti-money laundering and consumer protection measures. News reports frequently cover regulatory updates and licensing developments that impact how these entities operate and interact with traditional financial systems.