Macroeconomics

Engineering

FinTech

Financial services

Financial intermediary

Sandbox (software development)

Inefficiency

Financial risk

Economics

Market economy

Computer science

Risk analysis (engineering)

Business

Financial innovation

Systemic risk

Industrial organization

Software engineering

Finance

Financial regulation

Financial crisis

Emerging Markets Finance and Trade

Innovation technologies have substantially changed commerce and society. A new financial industry in the form of financial technology (fintech) initiated the era of the digital economy. At the same time, inherent risks in technology-driven financial innovations, such as technical risks, information asymmetry, and even potential systemic risks, necessitate regulatory responses. However, insufficient regulatory techniques, outdated financial laws, and conservative regulatory concepts make it difficult for traditional regulations based on financial intermediaries to adapt to the current environment of decentralized financial transactions. Technology-driven regulations focused on data monitoring could be a remedy for the inefficiency and ineffectiveness of traditional financial regulations and enhance effective protection of financial consumers’ rights and interests. This new regulatory model aims to build a system that integrates equal access to information on blockchain transactions by both parties to it (i.e., the regulators and the financial institutions they regulate) for the purpose of oversight, intelligent real-time oversight, and an experimental sandbox for developing regulatory technology. This dynamic and flexible financial regulatory system could effectively address fintech risks.

Evolutionary Approaches and the Construction of Technology-Driven Regulations