Decentralized Financial System and Economics

Academic unit or major

Humanities and social science courses

Instructor(s)

Junpei Miwa

Class Format

Lecture (Blended)

Media-enhanced courses

-

Day of week/Period
(Classrooms)

3-4 Wed

Class

-

Course Code

LAH.A532

Number of credits

100

Course offered

2024

Offered quarter

3Q

Syllabus updated

Mar 14, 2025

Language

Japanese

Syllabus

Course overview and goals

The financial regulations generally target the financial intermediaries with centralized governance system such as banks, insurers, asset managers and brokerage firms etc.
The growing distributed ledger technologies underpinned by decentralized blockchain is giving rise to the new financial services that builds on the nature of autonomy and decentralization. This type of financial services will dilute the effectiveness of current regulations owing to such non-centralized nature.
The purpose of this lecture will aim at i) considering how we manage and maintain the effectiveness of financial regulations (financial stability, user protection, AML etc.) amid the rise of so-called DeFi (Decentralized Finance) that builds on nature of autonomy and decentralization, and ii) exploring the necessity of an auxiliary or alternative approach that is more suitable for DeFi
These issues will be addressed based on the implications of law and economics.
In this context, this lecture will also seek to design new governance mechanism for decentralized financial system and consider how we operationalize it. The history of internet governance will provide a good reference point to consider the nature of decentalized network.
In addition, this lecture will additionally address the contemporary concerns over BigTech’s entry to financial system in order to contrast the nature between BigTech and DeFi, and to recognize the comprehensive concerns inherent to the financial regulations and current financial system.

Course description and aims

The lecture will facilitate the understandings on the role of financial regulations and seek for enhancing the capability to contemplate ongoing changes of financial system from pubic policy perspectives. Building on the contribution to discussion and submission of reports, we will explore a possible or ideal governance system and an approach against decentralization of financial system and cultivate the knowledge of new finance space such as Decentralized Finance (DeFi).

Student learning outcomes

実務経験と講義内容との関連 (又は実践的教育内容)

I have undertaken the various roles in the area of financial services for over 20 years and engaged in Japan Financial Services Agency “Kinyu-cho” for around 17 years.
I have experienced international standard-setting activities such as Basel II and III framework and engaged in the standard-settings under global regulatory reforms after great financial turmoil in 2008.
My business career has extended to various financial standard-setting activities - FSB, BCBS, IAIS, IOSCO and APEC as well as NGFS which is for regulator’s network on sustainable finance. Based on the experiences of international standard-setting activities and related domestic regulatory oversights, after 2017, my regulatory focus has extended to the area of FinTech and I have undertaken the position of Director, FinTech and Innovation Office firstly in JFSA.
My focus of technology is relating to the blockchain and the issues of possible regime shifts of financial system based on decentralized financial technology. In this activity, I recognize the necessity of neutral and fair platform to discuss the blockchain issues by various stakeholders amongst academia, cryptographers, developers, regulators and so forth.
I have contributed to building the fora, such as BGIN [Blockchain Governance Initiative Network] and studying the deep-dive issues through Blockchain Research Project in JFSA. I personally would like to contribute to enabling students to encourage and cultivate pragmatic views on finance - “New style of finance” with new paradigms together with you.

Keywords

finacial system, blockchain, Decentralized Finance, DeFi, FinTech, BigTech, Money theory, Privacy, Decentralized Governance, Web3

Competencies

• Specialist skills
• Intercultural skills
• Communication skills
• Critical thinking skills
• Practical and/or problem-solving skills

Class flow

Class 1 - Class 7：Lecture style (sometimes "unconference style" discussions are exercised (esp. Class 4 and 7))
(*) At the Class 4 and 7, special guests who are working for blockchain business and regulation will be invited to have an intensive discussion with students (s.t. unconference style).
- Students are required to write the "Interim" and "Wrap-up" Report and submit it through T2SCHOLA. (*cares should be taken about the deadline of each report that will be indicated in T2SCHOLA)
- Questions other than the content of the class will be accepted by e-mails by the course coordinator (See the item of "Contact information (e-mail and phone)" below).
- Students have to submit an "Interim and Wrap-up report" (after Class 4 and 7) (*cares should be taken about the deadline of each report ) through T2SCHOLA for assessment.
- ・Due to the lecturer’s schedule or business trip, the lecture will be on on-line basis, in some cases, but the quality control consistent with the physical lecture is sustained by sharing the information and guidance in T2SCHOLA as necessary.

Course schedule/Objectives

Study advice (preparation and review)

To enhance effective learning, students are encouraged to spend approximately 100 minutes preparing for class and another 100 minutes reviewing class content afterwards (including assignments) for each class.
They should do so by referring to course material.

Textbook(s)

nothing required.

Reference books, course materials, etc.

While the reference material will be provided thorough the lecture, the following webstite of JFSA reagarding "G20: Efforts on Governance Issues in Decentralized Financial Systems" is a good reference point to recognize the lecture. It is highly recommended to read the reserch papers on "Multilateral Joint Research Project."
https://www.fsa.go.jp/en/policy/bgin/information.html

Evaluation methods and criteria

Interim-Report and Wrap-up Report (40%+60%)
*Interim report: around 3000 letters in Japanese and 2000 words in case of English.
**Wrap-up Report: around 5000 letters in Japanese and 3500 words in case of English.

The volume of letters and words is just for desirable level of submission. The contents of reports are rather prioritized for assessment.
The assessment will have three pillars: (1) correctness of fact findings and understandings, (2) theoretical thinking to the theme, (3) self-notions to the theme. On top of that, the positive contribution of discussions and aspirations in the report will tend to be reflected in the assessment.

Related courses

• LAH.S437 ： Essence of Humanities and Social Sciences42:Consensus Building
• LAH.A401 ： Digital Innovation in Financial Institutions

Prerequisites

Hopeful: knowledge regarding finance and/or blockchain

Contact information (e-mail and phone) Notice : Please replace from ”[at]” to ”@”(half-width character).

Course instructor: Jumpei Miwa (j-miwa1976_at_outlook.jp (Please replace "_at_" with "@" (half-width character)))).

Course coordinator: Takehiro INOHARA (inostaff_at_shs.ens.titech.ac.jp (Please replace "_at_" with "@" (half-width character)))).

Office hours

While contact before and after classes, or e-mail for an appointment is allowed, it is pereferable that questions and notions are actively raised in the class as the time of Q&A session is ensured in the class.

Other

This course is 500-level course.
Tokyo Tech’s “wedge-shaped style education” enables students to pursue liberal arts education in a phased manner throughout undergraduate and graduate programs.
Students are encouraged to take 100-level to 600-level courses in order. As such, master’s students must begin Humanities and Social Science courses at the 400 level (in 1Q/2Q of the first year for those entering in April, and 3Q/4Q for those entering in September), then proceed to 500-level courses (in 3Q/4Q or later for those entering in April, and 1Q/2Q of the following year or later for those entering in September).