Dealing With Disruption: Emerging Approaches to FinTech Regulation
30 Pages Posted: 15 Apr 2020
This article examines the emerging regulatory responses to an ongoing fintech disruption of traditional finance. Focusing primarily on the U.S. experience to date, it offers a three-part taxonomy of principal approaches to fintech taken by financial regulators: what I call the “experimentation” approach, the “incorporation” approach, and the “accommodation” approach. Within this framework, the article analyzes the pros and cons of establishing regulatory sandboxes and innovation hubs, issuing special fintech charters, and pursuing various regulatory-adjustment measures under a broad heading of RegTech.
Keywords: fintech, blockchain, DLT, cryptoassets, RegTech, SupTech, financial regulation, fintech charter, regulatory sandbox, CBDC, AI, machine learning, smart regulation, financial innovation, systemic risk, financial stability, technocratic regulation, regulatory reform, Libra
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