Virtual Asset Licensing

Definition ∞ Virtual asset licensing is the process by which businesses dealing with cryptocurrencies and other digital assets obtain official permission to operate. This regulatory requirement mandates that entities offering services related to virtual assets, such as exchanges, custodians, or payment providers, secure formal authorization from relevant governmental or financial authorities. The licensing process typically involves demonstrating compliance with anti-money laundering (AML), know-your-customer (KYC), cybersecurity, and capital adequacy standards. It aims to ensure market integrity and protect consumers.
Context ∞ Virtual asset licensing is a central theme in global crypto regulation, with many jurisdictions establishing specific frameworks for digital asset service providers. News frequently reports on new licensing regimes, the challenges businesses face in obtaining and maintaining licenses, and enforcement actions against unlicensed operators. The trend towards comprehensive licensing reflects a global effort to bring the virtual asset sector under greater regulatory oversight.