How business schools are dealing with the rise in cryptocurrency

Over the past five years, digital finance has increasingly become part of business education
(Illustration by Raymond Biesinger)
(Illustration by Raymond Biesinger)

Cryptocurrency courses have become a big deal in a short amount of time—much like cryptocurrencies themselves. As recently as three years ago, it still seemed disreputable for business schools to teach about Bitcoin or other electronic currencies that are secured through online databases. “At the very beginning, there was a misconception that cryptos were funny money and a speculative tool,” says Henry Kim, associate professor at the Schulich School of Business, York University, and director and co-founder of the school’s blockchain.lab. “Business schools didn’t want to teach that because they thought it was faddish.”

Andreas Park, an associate professor of finance at the University of Toronto, agrees. “For the longest time there was great skepticism among my colleagues,” says Park, who will soon be starting a course on decentralized finance and cryptocurrency in the Rotman School of Management’s MBA program. Today, it’s more common to hear cryptocurrency described as something that is becoming an inescapable part of business education. That’s especially true of blockchain technology, the vast, decentralized databases that cryptocurrencies rely on to verify and process new transactions with a minimum of human involvement. “Blockchain has become part of elective business education over the past five years,” says Jean-Philippe Vergne, the former director of the Scotiabank Digital Banking Lab at Ivey Business School in London, Ont. “Over the next five, it will likely become part of core business education, just like database management is integrated into core business undergrad and graduate modules in information systems management.”


Katya Malinova is an associate professor at the DeGroote School of Business at McMaster University, where she teaches a course called “Introduction to FinTech” (financial technology). She says the status of these technologies seemed to reach a turning point in 2017, when there was a boom in cryptocurrency investment, with investors throwing money at cryptocurrency tokens (the equivalent of shares in a more conventional company) and companies like Bitcoin and its younger competitor Ethereum. Not all of these investments were wise, “but the idea of digitizing assets and putting them on the blockchain stuck,” Malinova says. And that raises questions about whether traditional financial technologies can be replaced by new ones. Even though the many worthless tokens of 2017 are sometimes referred to as a cautionary tale, that outpouring of investment made cryptocurrency impossible to ignore. By the fall of 2018, “it was fairly clear that FinTech and/or blockchain should be discussed in business schools,” Malinova says.

Business schools that added the subject as early as possible, before the boom of 2017, may be benefiting from being ahead of the curve, just as it paid off to be an early investor in Bitcoin. Vergne definitely thinks that’s true at Ivey, which began teaching about Bitcoin in 2013 and integrating it across programs in 2014; they were listed in a Forbes article on the relatively small number of important “bitcoin, blockchain and cryptocurrencies” courses. Vergne, now an associate professor at the UCL School of Management in London, England, co-designed the “Bitcoin Crash Course” when he was at Ivey, and says the school’s head start in integrating cryptocurrencies into its programming paid off for some of its students: “Several financial technology startups were founded in Toronto by Ivey alumni who took this kind of module,” says Vergne, referring to companies such as Ledn, Lending Loop and Satstreet. “They were the trailblazers and their trajectory has been spectacular,” he says.

It would be easy to assume that students, especially younger ones, would be pushing for knowledge on cryptocurrency to be included in business curriculums, but it’s not always the case. “When I started including it in my classes, most students hadn’t even heard of Bitcoin,” Park recalls. Vergne thinks students were initially reluctant to ask for courses on the subject—not because they didn’t know about it, but because “they simply did not believe that a school like Ivey, which can appear quite conservative at first, would be open to the idea. But as soon as they were presented with an opportunity to engage, interest surged, and students kept asking for more.”

Another aspect of business education that plays a role in increasing cryptocurrency’s profile is something that is one of the most important functions of MBA programs: helping graduates find work. “Business schools are very vocational,” Kim says. “We want to make sure we teach courses that are directly applicable for our students’ job opportunities or provide really good complementary learning for the jobs they take.” MBA programs can’t downplay something that’s becoming a major source of employment: “Clearly if there’s $2 trillion worth of investments in it, there’s probably some job opportunities there,” Kim adds.

The content of programs doesn’t only respond to the market; it also changes to fit research. “I would say that in most cases, faculty expertise is behind the introduction of new courses,” Malinova says. Don Cyr, professor of finance at Brock University’s Goodman School of Business, says that around 2015 or 2016, there was an “explosion” in the number of research studies being done on cryptocurrencies. Business schools also take some cues from professional certification programs; once the Chartered Financial Analyst (CFA) program included some of these topics, it became what Cyr calls “a very strong indicator” that they also belonged in MBA programs.

Even though cryptocurrency is a mostly new subject, most agree it still requires a traditional teaching approach. “Students are often very interested in the potential for investing in cryptocurrencies, and may have dabbled in it,” Cyr says, but they are “often unaware of the broader implications of blockchain or digital ledger technology in general in the finance field.” Asked if anything important has changed in the principles she teaches, Malinova says there is “nothing fundamentally new in my opinion.” Vergne says blockchain “changes the practice of finance in depth, but not its fundamental laws.” Park just says, “No. Economics is economics.”

(Illustration by Raymond Biesinger)
(Illustration by Raymond Biesinger)

There are, however, some new things that have to be taken into account when teaching this topic. The typical way to teach about financial history is by describing how a new concept developed out of a “pipeline of academic researchers and practitioners in the field of finance,” Cyr says, adding that a key fact about cryptocurrency is that it developed outside that pipeline: “We don’t know the identity of the developer of Bitcoin, and to some extent its adoption was fuelled by dissatisfaction with central banks and their control of the money supply.”

Business schools are also learning to focus not on individual currencies like Bitcoin—which themselves may well turn out to be fads—but the principles and technologies they’re attached to, which are impossible to put back into the bottle. Park says he often has to deal with the misconception that blockchain is the same thing as Bitcoin, and that the significant thing about blockchain is that it operates “all value transfers on a single infrastructure,” instead of splitting them up into payments, stocks, bonds and other assets we’ve gotten used to.

Park says a securities trade today requires the use of “many platforms and systems: your broker’s internal system, stock exchanges, clearing and settlement services, beneficiary ownership record keepers, custodian banks and the payments system—all separate and awkwardly linked,” he says. A blockchain combines all of these things, which could potentially reduce the role of those familiar platforms and systems, and the jobs that go with them.

In addition, because blockchain organizes investment and payment in such a streamlined way, without all those intermediaries, Vergne thinks it has the potential to shake up organization theory and how it’s taught. “It changes what we know about the role of managerial hierarchies and centralized coordination in the growth of business organizations,” he says. “This is where most of the exciting research is happening these days.”

That means we’re only seeing the beginning of the types of courses and teaching approaches that crypto and blockchain will inspire. Kim points to the University of Nicosia in Cyprus, which has “a complete master’s program in blockchain.” Closer to home, he notes, York University offers blockchain education through its School of Continuing Studies. Future classes will have the benefit of very informed, even experienced students, says Kim: “Most high schools in Toronto have a blockchain/Ethereum club. Eventually, we will see these folks in the MBA programs.”

As students come in more informed about the subject, faculty will need to figure out how to help them think about it in a transformative way; Malinova likes to point out that blockchain could help to reach the billions of people “who have no access to financial services through no fault of their own,” and she thinks there shouldn’t be too much focus on the potential negatives. “Yes, there are bad apples, scammers and the like, and they need to go, obviously,” she says. “But the important issue is how much good this new world can do. For what it’s worth, after taking my class, the students get it.” Park says that in order to make sure they’re providing a long-lasting education, business schools need to be “forward-looking, and inform students about the broad changes that blockchain technology can bring.” If cryptocurrency ends up changing the world, it will be partly because of the students and researchers who were convinced that it could.

This article appears in print in the August 2021 issue of Maclean’s magazine with the headline, “New kid on the blockchain.” Subscribe to the monthly print magazine here.