Regulated Financial Institutions

Definition ∞ Regulated financial institutions are organizations operating within the financial sector that are subject to oversight and rules imposed by governmental or independent regulatory bodies. These institutions include banks, credit unions, and investment firms. They adhere to strict guidelines concerning capital adequacy, consumer protection, and anti-money laundering. Their operations are designed to maintain financial stability and public trust.
Context ∞ The interaction between regulated financial institutions and the digital asset space is a prominent topic in current financial news. Many traditional institutions are exploring or adopting blockchain technology for various services. Regulators are actively working to extend existing frameworks to digital asset activities conducted by these entities. This aims to ensure compliance, manage systemic risks, and provide a secure environment for digital asset adoption.