Risk Governance

Definition ∞ Risk governance is the system of rules, practices, and processes used to identify, assess, and manage risks within an organization. In the digital asset industry, this involves establishing frameworks for addressing various risks, including cybersecurity threats, market volatility, regulatory changes, and operational failures specific to blockchain technology. Effective risk governance ensures compliance, protects assets, and maintains stakeholder confidence. It includes defining risk appetite, implementing controls, and conducting regular audits.
Context ∞ The state of risk governance in the digital asset sector is rapidly maturing as institutions and regulators demand greater accountability and control. A critical future development involves the integration of AI-driven risk assessment tools and the establishment of industry-wide best practices for managing novel risks associated with decentralized protocols.