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The rapid evolution of financial technology has brought remarkable efficiencies, but recent developments have underscored the urgent need for regulatory frameworks that keep pace with innovation. Our research at the University of Salford Business School, , aligns with key insights from the Financial Stability Board (FSB) and underscores the evolving landscape of financial systems.
Learning from the FTX Collapse: Strengthening Crypto Regulations
The collapse of FTX, a major cryptocurrency exchange, revealed critical regulatory gaps in the handling of digital financial services. The FSB has emphasized the need for stricter regulatory oversight, especially for companies that integrate multiple financial activities — such as trading, lending, and custody — within a single platform.
Our research (Usman et al., 2024) highlights the importance of:
- Stronger financial regulations to mitigate risks
- Enhanced enforcement mechanisms to prevent the misuse of customer funds
- Targeted frameworks that address technology-based money laundering, especially in developing economies
The Proposed Nigeria Financial Conduct Authority (NFCA) Act as an outcome of the research, aligns with the global call for enhanced financial oversight. This legislative framework is designed to regulate Nigeria’s expanding FinTech ecosystem, with a primary focus on ensuring consumer protection, market integrity, and financial stability.
Proposed Nigeria Financial Conduct Authority Act
Technological Determinism and Financial Systems: Embracing Innovation with Caution
Our research also explores Technological Determinism Theory, which suggests that technological advancements shape economic structures and societal behaviour. This theory is particularly relevant when examining the historical evolution of money and today’s FinTech innovations.
According to Fauvelle (2025), the Trade Theory of Money challenges the traditional barter-based understanding of value exchange, instead emphasizing the role of trade-driven innovations in shaping financial systems.
Key insights from the two studies include:
- Historical trade innovations (e.g., shell money, metal ingots) formalized monetary systems
- Emerging FinTech solutions have revolutionized transactions but also introduced new financial risks
- Regulatory frameworks must evolve to address these emerging risks and protect consumers
Key Takeaway: Regulation Must Evolve with Innovation
The financial landscape continues to evolve, demanding adaptive regulations that balance innovation with consumer protection. As financial technologies expand their reach, policymakers must develop frameworks that address modern risks while fostering growth and innovation.
Our research underscores that achieving financial stability requires a proactive approach — combining robust regulations, enhanced financial literacy, and dynamic enforcement strategies.
Join the Conversation
Have insights on evolving financial regulations or the impact of FinTech innovations? Let’s discuss how adaptive frameworks can build a safer, more inclusive financial future.
#FinTech #Regulation #FinancialStability #TechnologicalDeterminism #DigitalInnovation #DigitalAsset
By Nafisa Usman, PhD
Researcher: Salford Business School
University of Salford, Manchester UK
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