Bring cryptocurrencies into the accounting classroom

Cryptoassets are hot topics, but integrating them into the curriculum can be a challenge.
By Sean Stein Smith, CPA, CGMA, DBA

Cryptocurrencies and other digital assets are items that are attracting the attention of students, faculty, and institutions — and for good reason. Accounting students, the future leaders of the accounting profession, are entering a workplace in the midst of a radical disruption, and one that is increasingly digitized in nature. They realize that virtual assets, including bitcoin and lesser-known currencies such as Ripple and ether (the cryptocurrency associated with the Ethereum blockchain), may soon redefine how business is conducted across industry lines.

Cryptocurrencies have the potential to change many aspects of accounting, attestation, and tax work. With numerous options already in the marketplace, and more of them being created daily, cryptocurrencies are likely to see greater adoption in the near future. An example of just how fast this landscape is changing is the rise of the Initial Coin Offering process that continues to raise impressive amounts of funding.

Keeping up with the pace at which cryptocurrencies change is a challenge for educators, especially since the technical nature of this subject can seem intimidating. However, the subject is still worth addressing in accounting classes. Here are a few general tips to keep in mind when teaching about cryptocurrencies:

Explain why cryptocurrencies are so buzzworthy. Cryptocurrencies are, without a doubt, a hot topic, but students may not be clear on why they’re relevant to accounting. One fact they should be aware of is that cryptocurrencies operate in a decentralized manner, meaning that there is no Federal Reserve or SEC to regulate or issue new tokens. This is a radical departure from the traditional centralized method of transaction processing and control that governs how traditional currencies, such as U.S. dollars, function. While it’s still in its early stages, this alternative system of currency and transactions processing could end up disrupting the traditional currency market.

Two other characteristics of cryptocurrencies that set them apart from existing and proposed digital currencies are the limited anonymity they provide for users and the double spending protection they offer (it’s very difficult to counterfeit a cryptocurrency). Either topic could spark an interesting class discussion.

Analyze the different options. Bitcoin might get the most media attention of any cryptocurrency, but it is important to make sure that the curriculum covers the wide variety of cryptocurrencies that exist. For example, students might be surprised to know that Kodak plans to launch its own cryptocurrency, and that there is a cryptocurrency just for paying dental bills. Reviewing multiple types of cryptocurrencies and addressing their pros and cons is critical for educators seeking to give their students robust cryptocurrency knowledge.

Bring the real world into the classroom. Cryptocurrencies can be a tough subject to teach without tangible examples, since the area is so rapidly changing and technically involved. Even with great materials, motivated instructors, and interested students, cryptocurrencies can be an abstract idea to grasp, and even harder to learn how to use.

One tactic to try is to have students sign up for one of the cryptocurrency platforms, such as Coinbase. Signing up is free, and students are not required to purchase any currency. By getting a sense of how the platform works, students can experience some of the benefits and current pain points associated with these platforms, such as the limited number of cryptocurrencies available for purchase. They can also use the platform to see how cryptocurrencies perform in response to financial news events.

Research projects are a must. Cryptocurrencies are changing and evolving faster than almost anyone could have predicted, so fast that a syllabus made at the beginning of the semester may already be out-of-date by the end of the academic year. Encouraging students to research and read on their own will help facilitate better conversation in the classroom, and keep students abreast of important changes.

Every financial network, from CNBC to Bloomberg, has established cryptocurrency desks and news reporting. Students can access this material, in addition to news sites such as Cointelegraph, for free.

Cryptocurrencies are poised to change the way we do business. As blockchain technologies continue to gain acceptance, smart contracts, decentralized autonomous organizations, and decentralized business models will likely become more common. Cryptocurrencies will be used to finance, at least partially, the adoption of blockchain technologies and the conduct of businesses around them.

Therefore, for accounting faculty to equip students for success in the future business landscape, cryptocurrencies should be a part of the coursework moving forward. This represents a challenge, since faculty members also need to educate themselves on these topics, but also is an opportunity for forward-looking educators to differentiate their courses, and their students.

—Sean Stein Smith, CPA, CGMA, DBA, is an assistant professor at Lehman College in New York City. To comment on this article or to suggest an idea for another article, contact lead editor Courtney Vien.

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