Definition ∞ Regulatory Taxonomy refers to a structured classification system used by governing bodies to categorize and define various entities, products, or activities within a regulated sector. This system provides clarity, consistency, and a common language for applying rules and oversight. A well-defined regulatory taxonomy helps ensure that similar risks are treated similarly, promoting fair competition and effective supervision. It is fundamental for coherent legal frameworks.
Context ∞ For digital assets, establishing a clear regulatory taxonomy is a pressing global challenge frequently reported in crypto news. Jurisdictions are struggling to classify cryptocurrencies, stablecoins, and other digital tokens, leading to inconsistencies in how they are regulated as securities, commodities, or other asset types. A harmonized regulatory taxonomy is critical for providing legal certainty to cryptoasset firms, fostering innovation, and enabling more effective cross-border cooperation among supervisory authorities.
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