Regulating Financial Innovation: FinTech, Crypto-assets, DeFi, and Beyond

71 Pages Posted: 18 Jan 2024 Last revised: 18 Apr 2024

Date Written: December 29, 2023


The term “FinTech” encompasses advances in technology that facilitate financial innovations, such as crypto-assets, algorithmic smart contracts, and decentralized financial platforms and services. Although FinTech promises greatly expanded financial inclusion and other valuable economic benefits, its radical transformational consequences are threatening to disrupt finance and even jeopardize the stability of the financial system. Scholars have been grappling with how the law can control these risks, but their contributions to date have been largely ad hoc. They also disagree whether FinTech-driven innovations are radically changing the financial system, necessitating complete new forms of regulation, or whether those innovations merely present the same types of risks already associated with electronic banking. This Article attempts to build a systematic framework for regulating FinTech-driven innovations. In that process, it clarifies and simplifies the confusing terminology, which makes FinTech appear more complicated than it is. The Article also shows how its framework should more generally inform the regulation of financial innovation.

Keywords: FinTech, financial technology, crypto, Decentralized finance, DeFi, blockchain, regulating finance

Suggested Citation

Schwarcz, Steven L., Regulating Financial Innovation: FinTech, Crypto-assets, DeFi, and Beyond (December 29, 2023). Duke Law School Public Law & Legal Theory Series No. 2024-05, Available at SSRN: or

Steven L. Schwarcz (Contact Author)

Duke University School of Law ( email )

210 Science Drive
Box 90362
Durham, NC 27708
United States
919-613-7060 (Phone)
919-613-7231 (Fax)

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