Crypto Goes to College

Soon after Tal Rabin joined the University of Pennsylvania in the fall of 2020 the computer and information sciences professor successfully convinced the institution to let her teach a dedicated blockchain engineering class.

“I had a class of 140, but I was restricted by the size of the room,” she said. “There were 200 students on the waiting list who didn't get in, so it was definitely received with a lot of excitement.”

Despite the strong demand from students, Rabin, who specializes in cryptography, soon found the challenges that came with teaching such a broad subject with so few educational standards and course materials. With such a broad range of potentially relevant subjects to cover, Rabin says she often has to lean on the expertise of others.

“I invite all kinds of speakers to talk about things that I think are important for the blockchain but that I don't know about, such as law issues associated with blockchain, the [Securities and Exchange Commission], mining data, [non-fungible tokens] and art and things like that,” she said.

While interest in blockchain education is high, the courses that are available can vary significantly between institutions, and are often dependent on a small number of enthusiastic professors. “If I look around at courses that my friends are teaching, people are all teaching it from their vantage point,” said Rabin.

With minimal educational infrastructure – such as standards and certifications, even course materials and textbooks – to lean on, formal education in the blockchain space remains largely driven by individual professors. While they are occasionally supported by partnerships with blockchain native companies and foundations – such as Algorand Foundation, where Rabin serves as head of research – institutions of higher learning won’t be able to pump crypto graduates into the industry in significant numbers anytime soon. (In any case, only eight of 240 schools screened by CoinDesk for the Best Universities for Blockchain 2022 had an undergraduate major in blockchain.)

“It might still be a long way out, because what would such a credential include?” she said. “Would it include the foundations of the blockchain? Would it include understanding applications on top? Things are changing daily in this field, and it takes time for these things to mature.”

Enter Tradfi

Blockchain has long had a skills problem because adoption, investment and use cases have continually outpaced the availability of talent. Up until now the industry has been able to achieve significant growth relying on those who are self-taught and those they can train themselves, but that won’t be enough to bring the industry into the mainstream.

Though it’s still relatively early days some of the biggest names in finance – including JPMorgan Chase, Morgan Stanley and Goldman Sachs – are already betting big on blockchain. In fact, JPMorgan’s crypto team is already staffed by 200 full-time employees.

Blockchain has the potential to touch nearly every corner of the traditional financial industry, ranging from investment banks to private equity firms, hedge funds, law firms, payments providers and more. As a result, there will be a massive need for qualified talent with an equally broad range of blockchain-based skills throughout the sector in the years ahead.

As more traditional institutions look to grow their blockchain capabilities – and with it, their talent rosters – many are looking for some sort of educational standard. That is especially true in finance, a heavily regulated industry that has long had to maintain strict licensing and educational requirements for compliance reasons, and is accustomed to considering candidates in large part based on their formal education.

While some may fear the finance industry having an outsized influence on blockchain education, Rabin said its strongest promoters remain the blockchain-native startups, at least for now.

“At this point in time the people who are giving funds to universities to create educational programs are the blockchain companies, not the traditional financial industry, so at this point their voice is being heard more,” she said.

Up until quite recently, however, there was no such thing as formal education in blockchain, and what exists today is hardly sufficient to support a finance industry that is taking blockchain’s potential seriously, as many finally are.

The relatively young crypto industry, in near total contrast, has long prized those self-taught enthusiasts over those who descend from an ivory tower, in keeping with the decentralized, grassroots nature of the movement. That mentality, however, may soon be at risk of becoming a victim of its own success.

The self-taught pioneers of the field were so effective in convincing the rest of the world to take the space seriously that many traditional financial institutions are rapidly enhancing their blockchain capabilities and are hungry for talent; too hungry to rely on the self-taught talent pool alone. Now the market is calling for a more effective and universal education infrastructure that can help carry the industry into the future.

“There’s been a big step change in demand,” says Caroline Lo, a partner and co-leader of the financial services practice at True, a global executive talent search firm. “It started when a number of very well-known hedge funds stated that 2% of their wealth was in crypto; statements like that raised the bar of confidence that crypto is here to stay.”

Today, more than a third of traditional hedge funds invest in digital assets, according to a recent PwC report, and more than two-thirds intend to increase their holdings by the end of the year.

Lo, who spent 15 working for traditional financial institutions, says the heavily regulated industry is accustomed to hiring staff with a seal of approval from a trusted educational institution, or those who have at least passed a standard evaluation.

“For example, to become a salesperson selling derivatives you have to have achieved a certain level of knowledge in derivative understanding and risk profiles and know how the product is traded in order to sell it,” she said. “Anyone in the derivative market takes that same test, whether they’re in London or Hong Kong or New York.”

Lo explains that while many in the industry are still curious about the technology and keen to expand their blockchain capabilities, they often can’t move as quickly as they would like because of the challenges associated with qualifying talent.

“What companies go through now when they're hiring at a junior or mid level is they have to go through more rounds of interviewing than they would for a non-crypto hire in order to build confidence and consensus that this person has the required skills,” she said.

Lo added that the task is made harder by the number of enthusiasts who are self-taught but not to a sufficient degree. She explained that many can talk the talk in an interview but it’s much harder to identify those who actually have the required skills.

“If there was some kind of understanding and certification that people could achieve, it would be very helpful to the industry,” she said. “It would set a bar for quality and confidence in the industry, which could help blockchain and crypto become more mainstream within financial services.”

For the meantime Lo said most are relying on their ability to up-skill existing staff or hire candidates with relevant education in adjacent fields. There also seems to be a preference for candidates who participate in on-campus blockchain clubs, and those with some prior work experience at blockchain-related startups. She is also seeing a lot of traditional financial institutions putting together teams that combine blockchain skills with experts from other disciplines when they struggle to find enough candidates with expertise in both areas.

“For example, where we see a lot of that activity is in building up teams in payments companies,” said Lo. “What a number of firms have had to do is put together a team where some people know payments and some people know crypto, but it’s been very hard to find anyone who knows crypto payments.”

What happens to the self-taught?

While the industry is calling for more regulation, educational standards and eventually a broadly accepted credential, Lo also said it's important to exercise caution, especially in such a new and fragile field. She, like many, fears what might happen if educational requirements become too stringent, or lead companies to dismiss those without a certain credential.

“You can go too far with something like that,  especially in a market that is still very early but is hugely creative,” said Lo. “You need to make sure it's set the right way so that innovation is not stifled, but it allows for fantastically innovative and creative people to have an accreditation that recognizes them as being qualified to build, create and advise on crypto.”

A field that combines technology and finance striking a balance between the self-taught and the credentialed will be delicate but vital to enabling ongoing innovation. The tech industry itself has long welcomed the talented dropout on an equal playing field with the top-tier university graduate, but finance generally has a preference for one profile over the other.

If and when a broadly accepted credential is established, however, it could serve to limit the career opportunities of those without one.

Gina Pieters, an assistant instructional professor at the University of Chicago’s Department of Economics – which offers blockchain-specific undergraduate and graduate-level courses – isn’t concerned that more formal education will push out those who are self-taught, however. That is because she said the two are rarely competing for the same career opportunities; the self-taught tend to prefer working for (or starting) blockchain native companies, as opposed to working for more traditional institutions.

“It fulfills a slightly different niche,” she said. “People will continue self-studying, and we encourage that. I don't think we are replacing that, and I don't think it's a competing product.”

Pieters explained that students who are eyeing careers in blockchain-native companies and startups tend to take those courses out of personal interest. Those who are keen on applying for roles with traditional financial institutions, however, seem confident that even a limited educational background in the field will serve as an asset.

“If students want to go to J.P. Morgan or a traditional firm, they’ll think, ‘this might give me an edge,’” she said. “For them it’s adding an additional ability to talk about when they're interviewing.”

Those who are seeking jobs in major financial institutions after graduation believe that even listing a blockchain-related course on their résumé is an asset, given the demand for such skills and the limited credentialing that exists. “With the traditional firm going into the crypto space you see a far more traditional mindset in that regard,” she said.

At the same time Pieters doesn’t think those same candidates are taking job opportunities away from the self-educated. “The self-study students would prefer a job with a crypto [or blockchain-native] firm,” she said.

As of now the two worlds work well together, with both the formally educated and self-taught finding their own place within the industry. What she and others fear, however, is that the push to establish more formal educational standards and credentials could limit opportunities for those who are self-educated.

“If firms accept sub-standard workers simply because they have formal education, that's a failure,” she said. “At the same time there are people for whom the formal education system works well, and to say we should only accept self-study learners is also unfair.”