Regulatory Scope Extension

Definition ∞ Regulatory Scope Extension is the broadening of existing legal and governmental oversight to include new areas, entities, or technologies. In the digital asset domain, this involves applying or adapting traditional financial regulations to cryptocurrencies, blockchain protocols, and decentralized finance. It aims to address perceived gaps in consumer protection, market stability, and anti-illicit finance measures. This expansion often occurs in response to market growth and technological shifts.
Context ∞ Regulatory scope extension is a constant theme in cryptocurrency news, as governments worldwide grapple with how to supervise the rapidly evolving digital asset sector. Debates often center on whether new legislation is needed or if existing laws can be sufficiently applied. The ongoing challenge involves finding a balance between fostering innovation and mitigating risks associated with unregulated activities.