Treasury Systemic Designation

Definition ∞ A formal classification by a treasury department or financial authority indicating that a financial institution or activity is so critical to the financial system that its failure could cause widespread economic disruption. This designation typically leads to heightened regulatory scrutiny.
Context ∞ The potential for certain digital asset entities or stablecoins to receive a treasury systemic designation is a significant regulatory concern. Such a classification would impose stringent capital, liquidity, and risk management requirements, profoundly altering their operational landscape.