Regulated Digital Banking

Definition ∞ Regulated digital banking refers to financial services provided through digital channels by institutions that operate under the direct oversight and licensing of governmental authorities. These banks adhere to established financial regulations concerning capital requirements, consumer protection, anti-money laundering (AML), and know-your-customer (KYC) protocols. It combines technological convenience with the safety and compliance standards of traditional banking. This model offers increased trust and security.
Context ∞ The emergence of regulated digital banking is a key development in the modernization of the financial sector, offering a more secure and compliant pathway for digital asset integration. Discussions often center on how these institutions can leverage blockchain technology while maintaining regulatory adherence and managing new forms of digital risk. This sector is expected to expand, providing a trusted environment for digital asset custody and transactions. News frequently covers new licenses and operational models in this space.