Are Cryptocurrencies Safe for Kids? Or are We Believing So?
Cryptocurrencies are some of the most in-demand investment assets among children and teen
The year 2021 witnessed a lot of milestones with respect to the growth and adoption of cryptocurrencies on a global basis. The most popular digital coin, Bitcoin, exploded like never before, taking the crypto market to new highs. But the market collapsed instantly due to several factors including China’s ban on cryptocurrencies and the fact that the Indian government almost restricted the use of private digital currencies among Indian investors. Nonetheless, crypto assets emerged as the decentralized alternatives to fiat currencies. Over time, their use cases evolved exponentially and now, even after witnessing extreme levels of volatility, more and more new investors are entering the market. Surprisingly, the crypto market has welcomed a new host of the investor class, i.e., young, college students and kids who wish to start earning early and secure their financial careers by investing in the most popular asset class in the market.
This craze is especially prominent among Indian teens and kids. Their pocket money and zeal towards becoming young profit earners in the market are fueling India’s acceleration in the crypto market space. Experts believe that they are generally drawn towards the promise of heavy profits by Bitcoin and other tokens and are quickly getting acquainted with market ups and downs. Besides, the combination of accessible tools and constant media attention towards the market, fawning over every major dip or price hike has also created a deep interest within them. Even children below the age of 18 are seeking the opportunity to start investing now and reap the benefits of longer investment opportunities.
The good news is that parents can have access to open custodial accounts for their children. Their children own the assets, but the account is managed by the parents. They can buy cryptos on behalf of their kids. This is because most crypto exchanges that provide the simplest way to acquire crypto require the traders to be of at least 18 years of age to set up an account. This step is especially taken by the crypto exchange authorities to ensure security and fraud prevention. But as cryptocurrencies are becoming a popular concept for kids and teens, is it actually safe for them?
Replacing Piggy Banks with Cryptocurrencies?
Crypto went mainstream only a few years ago. Crypto analysts believe that 2022 will witness an influx of new investors in the market. While the increased interest in cryptocurrency is quite noteworthy, it is also raising concerns about its impact on those under the age of 18, and how they are interacting with digital assets. Currently, there are no regulations specifically meant for children, experts believe that exchanges and crypto platforms should consider the important factors concerning the fact that children should be protected from frauds and scammers. Given the anonymity around crypto transactions, crypto leaders are quite aware of the fact that anybody can set up and access a cryptocurrency wallet.
Also, technically, there are no age restrictions when it comes to crypto, most major cryptocurrency exchanges require KYC to ensure that the users are 18 years of age or older. The only positive step that parents can take is to make sure that they introduce cryptocurrencies to their kids in a proper manner.
Should Kids Invest in Cryptocurrencies?
It is quite a complex question to answer since kids generally will not be to take charge of their crypto wallets themselves. Given the risks associated with cryptocurrencies and mishandling blockchain in regard to minors, it is quite obvious that not just the parents but even the community members will have to step forward in order to protect these young crypto enthusiasts. Experts think that blockchain applications should have built-in KYC requirements. Besides, having more educational tools for crypto might also help children and trends get a grasp of crypto investment, volatility, and scams in a more enhanced and efficient manner.
However, considering the extreme volatility and other risks, like the absence of any rigid crypto regulations are also other critical factors that parents should consider while introducing their children to crypto safety concerns.
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