Keywords
DeFi, blockchain, cryptoassets, regulation
Abstract
This article examines responses to the regulatory challenges posed by decentralised finance (DeFi), a fast-evolving domain of blockchain-based financial innovation. It investigates the factors shaping divergent regulatory strategies, with a focus on the European Union’s comprehensive cryptoasset framework and selected comparative insights. Adopting a qualitative legal methodology – combining doctrinal-functional analysis, multivocal literature review, and two case studies – the authors explore how regulatory responses are influenced by three key variables: legal tradition, the financial function performed by blockchain-based solutions, and the level of technological and institutional autonomy. The case studies – Bitcoin as a payment instrument and cryptoassets as collateral – illustrate how functional and institutional contexts shape regulatory treatment. The findings suggest that highly autonomous DeFi solutions challenge traditional supervisory models, necessitating novel forms of regulatory engagement. Moreover, effective regulatory design depends on balancing legal certainty, innovation, and market integrity. The study concludes that rigid regulatory frameworks may hinder innovation and recommends greater use of soft law instruments and dynamic supervisory mechanisms to promote both adaptability and legal enforceability. The article contributes to scholarly and policy discourse by presenting one of the first analyses of recent regulatory documents, which have not yet been examined in the peer-reviewed literature. Through an interdisciplinary approach bridging finance, law, and technology, it provides practical insights for legal practitioners, financial professionals, and DeFi developers, alongside a concise conceptual overview of DeFi’s technological foundations
Acknowledgments
Views expressed in this article do not necessarily reflect position of institutions where the authors are employed.
Contribution
Both authors contribute equally to the paper.
Funding
The authors did not receive a financial grant to publish the article.
Declaration of Conflicting Interests
The authors declare no potential conflicts of interest with respect to the research, authorship, and publication of the article. The views expressed in this article do not necessarily reflect the position of institutions where the authors are employed.
Declaration About the Scope of AI Utilization
In the preparation of the paper, the authors used AI tools (Microsoft Copilot, Perplexity AI, Google Translate, and DeepL, state as of October 2025) to assist with literature searches and to improve the article’s language and readability.
Recommended Citation
Wisła, J., & Bartoszewska, J. (2025). Technological Disruption and Regulatory Response: The Case of Decentralised Finance. Journal of Banking and Financial Economics, 2025(2), 135-164. https://doi.org/10.7172/2353-6845.jbfe.2025.2.8
First Page
135
Last Page
164
Page Count
30
Received Date
31.07.2025
Revised Date
22.10.2025
Accept Date
25.10.2025
Online Available Date
5.12.2025
DOI
10.7172/2353-6845.jbfe.2025.2.8
JEL Code
G180, G280, K2
Publisher
University of Warsaw
