Amid the recent rise of cryptocurrency trading, the question arises of whether digital currency is safe for kids. Some argue age verification and education should be enforced for minors who are lately dabbling in this segment of the crypto space.
The younger generation is adopting cryptocurrencies at a fast pace and it is being predicted that cryptocurrency users may touch the 1 billion mark by the end of 2022. It is further learned that millennials in the age group of 26 to 41 are mostly getting attracted to the segment to build wealth. A study conducted in 2021 revealed at least 94 percent of the cryptocurrency owners were in the age group of 18 to 40.
Mounting interest in the segment is notable and concerns are being raised about users below the age of 18 are interacting with cryptocurrencies. A recent report by UNICEF titled Prospects for children in 2022 highlighted challenges related to impact on children.
Policy specialist at the UNICEF's Office of Global Insight and Policy, Melvin Breton, said the crypto industry is still in the developing phase and this is the reason it requires child safeguards.
It is important to take steps to prevent children from any harm occurring by third parties or even from self-inflicted harm. Children under the age of 18 need to be prepared for a future as cryptocurrencies and blockchain applications could be a part of everyday life as it is now the internet.
Guerrero added minors should be ensured not to wrongly engage with the blockchain applications or even misuse the segment.
He noted further that blockchain could turn up harmful for children as the information recorded in it is immutable and permanent. This could conflict with the current regulations.
Cryptocurrency transactions are anonymous and this means anyone can set up and have access to its wallet. Some crypto exchanges even don't question the age of users.
However, some online crypto exchanges have started asking for the submission of Know Your Customer (KYC) documents to ensure the application comes from an adult. Coinbase requires the users should be at least 18 years old.
Meanwhile, the Gemini cryptocurrency exchange is offering custodial accounts to minors and parents can invest in the financial futures of children.
Fortunately, organizations like UNICEF are making progress in finding a solution to the issue and recognizing the associated challenges. Blockchain applications should be well-equipped with KYC requirements.
Meanwhile, some of the crypto exchanges are implementing AI and other software programsÂ to know the well-being of children and simultaneously teach students about financial literacy.