Digital currency regulation refers to the set of laws and guidelines that govern the use and exchange of digital currencies, such as Bitcoin and Ethereum. These regulations aim to ensure consumer protection, prevent fraud, and promote financial stability in the rapidly evolving digital economy. Governments and regulatory bodies, like the U.S. Securities and Exchange Commission (SEC) and the European Central Bank (ECB), are increasingly focusing on how to manage digital currencies. This includes defining what constitutes a digital asset, establishing taxation rules, and addressing issues related to money laundering and terrorist financing.