Definition ∞ A regulated broker-dealer is a financial institution authorized by government agencies to buy and sell securities on behalf of its clients or for its own account. These entities operate under strict rules concerning capital requirements, customer protection, and market conduct. In the context of digital assets, a regulated broker-dealer would facilitate the trading of cryptocurrencies or tokenized securities while adhering to established financial regulations. This provides a secure and compliant trading environment.
Context ∞ The state of regulated broker-dealers in the digital asset space is slowly expanding, as traditional financial firms seek to enter the cryptocurrency market under existing regulatory frameworks. A key debate involves how existing securities laws apply to various digital assets, and whether new classifications or regulatory bodies are needed. Critical future developments include clearer guidance from regulatory authorities on the permissible activities for broker-dealers dealing with digital assets, fostering greater institutional participation.
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