The corporation is a technology. That claim might sound strange in an era when “technology” conjures images of blockchains and smartphones, but it is the starting premise of my A History of Financial Technology and Regulation, published by Cambridge University Press. The legal structures that enable people to pool capital, share risk, and build enterprises at scale are themselves inventions – and every one of them arrived before the law was ready.

This pattern – innovation first, regulation after, crisis in between – is not a bug of the modern fintech era. It is the recurring story of finance itself.

What counts as financial technology

I define financial technology broadly: any tool, structure, or mechanism that enables financial transactions to occur at greater speed, scale, or efficiency than previously possible. By this measure, the history of fintech does not begin with Bitcoin. It begins with the colonial-era corporation.

Early American corporations were creatures of special legislative charter – each one individually authorized by a state legislature. The corporate form was itself a radical innovation: it allowed strangers to invest in a common enterprise, limit their personal liability, and transfer their ownership shares to others. These features – pooling, limited liability, transferability – are the same features that make modern financial instruments work, from mutual funds to tokenized assets.

The shift from special charters to general incorporation statutes in the 19th century was the first great “scaling” moment in American financial technology. Suddenly, anyone could form a corporation by filing paperwork, without needing a legislative act. This democratization of the corporate form unleashed a wave of capital formation – and a wave of fraud that eventually produced the securities laws of the 1930s.

The cycle repeats

Each major financial innovation follows the same arc. A new tool emerges that expands access to capital or reduces transaction costs. Entrepreneurs and investors adopt it faster than regulators can understand it. Some of those adopters are fraudsters. A crisis forces a regulatory response. The response stabilizes the market but also creates rigidities that the next innovation will eventually disrupt.

I trace this cycle through several iterations. The rise of general incorporation led to stock market speculation led to the crash of 1929 led to the Securities Act of 1933 and the Exchange Act of 1934. The mutual fund emerged as a vehicle for retail investment, grew explosively, and was eventually disciplined by the Investment Company Act of 1940. Each regulatory response was necessary and beneficial – but each also froze in place assumptions about how financial instruments worked and who used them.

Decades later, the JOBS Act of 2012 attempted to update securities regulation for the internet age by legalizing equity crowdfunding – allowing ordinary people to invest small amounts in startups through online platforms. Crowdfunding was itself a financial technology, one that used the internet to do what the corporate form had done centuries earlier: pool capital from dispersed investors into productive enterprises.

Cryptocurrency as the latest chapter

Cryptocurrency and blockchain fit neatly into my historical framework. Bitcoin, launched in 2009, is a financial technology that enables peer-to-peer value transfer without intermediaries. Ethereum, launched in 2015, extended this capability to programmable financial contracts. Initial coin offerings (ICOs) used these platforms to raise capital from global investors, often without any regulatory compliance at all.

The predictable crisis arrived. The ICO boom of 2017-2018 produced spectacular frauds alongside legitimate projects. The SEC responded with enforcement actions, applying the Howey test – a doctrine from 1946 – to instruments that bore little resemblance to the citrus-grove contracts the test was designed to evaluate.

my historical lens reveals why this response was both inevitable and insufficient. Inevitable, because the regulatory cycle demands a response to crisis. Insufficient, because the response relied on legal frameworks built for an earlier generation of financial technology. The securities laws of the 1930s assumed centralized issuers, identifiable promoters, and instruments with fixed characteristics. Decentralized protocols, pseudonymous developers, and tokens that change function over time challenge every one of those assumptions.

The lesson of the long view

The value of my historical approach is not antiquarian. It is diagnostic. By showing that the tension between financial innovation and regulation is centuries old, I reframe the current debates over cryptocurrency, DeFi, and stablecoin regulation as the latest iteration of a structural pattern – not an unprecedented crisis requiring unprecedented measures.

This perspective yields a practical insight: the best regulatory responses have been those that understood the new technology on its own terms, rather than forcing it into categories designed for its predecessors. General incorporation statutes worked because they accepted the corporation as a legitimate and scalable form, rather than trying to evaluate each company through the lens of the special-charter system it replaced. The securities laws of the 1930s worked because they recognized public stock offerings as a distinct activity requiring purpose-built disclosure rules, rather than trying to regulate them under existing contract or property law.

The implication for today’s policymakers is clear. Regulating cryptocurrency with a test designed for orange-grove contracts, or governing DeFi with rules built for centralized exchanges, is the modern equivalent of applying special-charter logic to general incorporation. It can work in individual cases, but it cannot produce a coherent or durable framework.

The book provides the historical foundation for understanding why new financial technologies demand new legal frameworks – and why the stakes of getting this wrong have been consistently high across three centuries of American financial history.

Read the full book: Seth C. Oranburg, A History of Financial Technology and Regulation: From American Incorporation to Cryptocurrency and Crowdfunding (Cambridge University Press, 2022).