Definition ∞ Policy divergence refers to a situation where different jurisdictions or regulatory bodies adopt distinct or conflicting approaches to regulating a particular activity or asset. This creates inconsistencies in legal frameworks across regions, leading to regulatory fragmentation. Such divergence can present challenges for businesses operating internationally, requiring them to comply with varying sets of rules. It can also create opportunities for regulatory arbitrage.
Context ∞ In the global digital asset landscape, policy divergence is a prominent issue, with various countries implementing different rules for cryptocurrencies, stablecoins, and blockchain technology. This lack of a unified regulatory approach creates complexities for global crypto businesses and investors. News frequently reports on efforts to bridge these policy gaps or highlights the consequences of differing regulatory stances on market development.
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