Definition ∞ Wrapped Tokens Guidance refers to official directives or recommendations concerning the regulatory treatment and operational requirements for wrapped tokens. These tokens are cryptocurrency assets pegged to the value of another cryptocurrency, often on a different blockchain. The guidance addresses issues such as their classification, custody, and the responsibilities of the wrapping entity. Its purpose is to provide clarity for market participants and ensure compliance.
Context ∞ Wrapped Tokens Guidance is a growing area of focus for financial regulators as cross-chain interoperability becomes more prevalent in the digital asset space. Discussions frequently center on whether wrapped tokens should be treated as derivatives, securities, or distinct digital assets, impacting their regulatory oversight. A key debate involves establishing clear responsibilities for the entities that issue and maintain the peg of these wrapped assets. Future regulatory frameworks are expected to provide more specific instructions on the risk management, auditing, and disclosure requirements for wrapped tokens to protect consumers and maintain market stability.
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