Definition ∞ A regulated banking bridge is a compliant interface or service that connects traditional regulated financial institutions with the digital asset ecosystem. It facilitates the secure and legally compliant transfer of value and information between conventional banking systems and blockchain-based platforms. This bridge operates under existing financial regulations. It aims to integrate new digital financial instruments with established frameworks.
Context ∞ The development of regulated banking bridges is frequently discussed in news concerning the mainstream adoption of digital assets and decentralized finance. These bridges are essential for increasing institutional participation by addressing critical concerns related to compliance, anti-money laundering (AML), and consumer protection. Their continued evolution is key to fostering greater interoperability and trust between traditional finance and the crypto economy.