From Disruption To Design: Regulating Financial Intermediation In The Digital Age

This article examines the transformation of financial intermediation in the digital age, moving beyond the traditional dichotomy between disintermediation and reintermediation to propose a more nuanced, function-based regulatory perspective. It analyses how emerging technologies—such as artificial intelligence, blockchain, smart contracts, and decentralized autonomous organizations (DAOs)—are reshaping the architecture of financial markets, altering the allocation of risk, trust, and accountability. The contribution integrates legal, economic, and technological insights to reassess classical theories of financial intermediation in light of algorithmic decision-making, platform-based finance, and embedded governance mechanisms. Particular attention is devoted to the rise of new digital gatekeepers, the persistence of systemic risk, and the challenges posed by algorithmic bias, DAO liability, and quantum-related cybersecurity threats. The article adopts a comparative and forward-looking approach, critically examining recent regulatory developments, including the EU framework under MiCA, PSD2/PSD3, DORA, and the AI Act, alongside regulatory experimentation such as sandboxes and supervisory technologies (SupTech and RegTech). It argues that effective oversight in digital finance requires adaptive legal architectures capable of embedding regulatory objectives directly into technological infrastructures, thereby reconciling innovation, financial inclusion, and systemic stability in an increasingly hybrid financial ecosystem.