Cryptocurrencies are an emerging asset class that both complements and disrupts conventional financial mechanisms, markets, and intermediary functions. By taking this class, you will learn about the role cryptocurrencies play in the decentralisation of finance, and the key market functions and risks that have arisen with the growth of decentralised finance (DeFi) in the cryptocurrency ecosystem. More specifically, you will learn about the role and function of cryptocurrencies and privacy coins. You will be exposed to the motivations behind the use of decentralised financial services, and how they differ from the ‘centralised’ approach taken in conventional finance settings. You will develop a technical understanding of how decentralised finance operates and the various sub-markets and technological innovations that have emerged to support its development. You will be introduced to the primary blockchains used to facilitate the decentralised movement of digital currencies and assets. You will learn about the design and operation of decentralised stablecoins, exchanges (DEXs), lending protocols and practices, and autonomous organisations (DAOs). You will also investigate the risks associated with decentralised finance. Focus will be placed on privacy coins, the use of alternative assets, regulation, and the rise of human-enabled criminality in the cryptocurrency ecosystem. You will explore how decentralised finance implementations can be leveraged for illicit actions such as money laundering or fraudulent schemes. You will be introduced to the regulatory distinctions between centralised and decentralised finance, and engage in discussions on the financial stability, financial contagion, and behavioural finance implications of the decentralisation of finance.

The indicative syllabus covers fundamental and emerging issues in cryptocurrencies, decentralised finance, and behavioural finance theory and practice, including sessions on 'CeFi vs. DeFi’ (e.g. What is decentralised finance? How does it differ from ‘traditional’ finance?; Benefits and Drawbacks of each system; The cryptocurrency ecosystem; Markets, Exchanges, and Financial Service Functions), 'Cryptocurrencies as a medium of exchange' (e.g. Bitcoin, Altcoins, Privacy Coins, and Digital Assets; Bitcoin as a proxy for ‘money’ and ‘gold’), 'Blockchains and Smart Contracts' (e.g. How they work and verify; Design, Evolution, and Operation of Ethereum and Solana; Layer 1, Layer 2, and Cross-chain trading), 'Decentralisation of finance' (Peer-to-peer exchange, Market Liquidity, Automated Market Making, DAOs, and Lending Protocols), 'Regulatory Coverage in Crypto' (e.g. CeFi vs. DeFi: what is covered by regulation?; cross-juridiction and pan-global regulations; Risk Exposure and Backstops: the case for regulation), 'Financial Actors in Decentralised Settings' (e.g. Technological vulnerabilities in decentralised settings; Behavioural Finance in Crypto; Are crypto users ‘risky’?; Governance practices and sustainable funding of operations), 'Illicit Operations in Decentralised Finance' (e.g. Money Laundering; Privacy Coins and Crypto Mixers; Crypto Scams (Rug Pulls)), 'Implications of Decentralised Finance for Financial Stability' (e.g. Link between Crypto and Conventional Financial Markets; Financial Contagion: past and present; Automated Stablecoins: Supply, Demand, Incentives, and potential for failure)

On successful completion of this module, students will be able to: Describe the function of decentralised financial services. Illustrate differences in regulatory coverage for centralised and decentralised financial services in the cryptocurrency ecosystem. Analyse the effectiveness of automated market-making designs and incentives in maintaining liquidity pools. Investigate market failures and financial stability concerns associated with decentralised finance functions. Critically evaluate the source and cause of illicit operations in decentralised finance contexts

On successful completion of this module, students will be able to: Reflect on the role of human actors in decentralised finance settings

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The module is delivered through an integrated blend of lectures and applied tutorials that emphasise active learning. Lectures incorporate contemporary research findings, emerging regulatory developments, and the latest innovations in decentralised finance, cryptocurrencies, and behavioural finance, ensuring that students engage with cutting edge scholarship and real time industry evolution. Applied tutorials use current case studies, including recent market events, advances in blockchain architecture, updates in cross jurisdictional regulatory frameworks, and the latest empirical studies on crypto user behaviour, to bridge theory and practice. These tutorials will be data driven sessions to further immerse students in recent datasets, evolving protocol designs, and live chain analytics tools, enabling them to critically analyse how new research insights and technological upgrades (e.g., Layer 2 scaling solutions, automated market making mechanisms, DAO governance models, and emerging stablecoin structures) shape risk, opportunity, and financial stability in decentralised systems. Collectively, this delivery approach ensures that students develop technical competence while remaining grounded in the most up to date academic and industry discourse on the rapidly shifting landscape of digital and decentralised finance.