UNICEF calls for child safeguards amid mainstream crypto adoption

UNICEF’s latest report on mainstream adoption of cryptocurrencies highlights the possibility of greater financial inclusion along with the need for new child safeguards.

The United Nations Children’s Fund has called for incorporating child safeguards into online child protection initiatives, citing financial and exploitative threats posed by unregulated crypto markets.

UNICEF’s “Prospects for children in 2022” report, which examines the impact of global trends on children, anticipates further mainstream adoption of cryptocurrencies — “demonstrating both the promise of greater financial inclusion and the need for new child safeguards.”

The report shows that digital currencies have gained widespread interest in 87 countries by the end of 2021, with the majority of jurisdictions experimenting on their own versions of a central bank digital currency. UNICEF expects a similar growth trajectory in 2022, as the report states:

“A potential alliance between governments, large banks and investment firms against challenger banks and blockchain-based finance could arise in many countries.”

The push for crypto’s mainstream adoption is also fueled by the economic pressures levied by the COVID-19 pandemic. As UNICEF reported, the economic recovery in high-income countries will slow will see an increase this year despite factoring in future disruptions from the pandemic.

UNICEF also expects the collaboration of governments, large banks and investment firms with crypto and blockchain firms:

“These developments will eventually require the emergence of national and international legal and regulatory frameworks. As we wait to see what direction these trends take us in, the implications for children hang in the balance.”

With mainstreaming of cryptocurrencies, UNICEF acknowledges the significant benefits bestowed via financial inclusion and “frictionless remittances and more instant, transparent and efficient social assistance programs.”

However, the United Nations agency warns about the threats posed by unregulated markets to the well-being of children, such as stability of financial systems and deteriorating government revenues. 

Calling out for new child safeguarding reforms, the report also highlights some of the possible negative impacts of unregulated transactions that support child trafficking, sexual exploitation, the sale and purchase of content depicting child abuse, and defrauding and extortion of children. On an end note, UNICEF suggested:

“Now is the time to begin incorporating cryptocurrency and digital currency child safeguards into online child protection initiatives.”

Related: Nations to adopt Bitcoin, crypto users to reach 1B by 2023: Report

A Crypto.com report predicts that global crypto users could reach one billion by the end of 2022. As Cointelegraph reported, the global crypto population increased by 178% in 2021, rising from 106 million in January to 295 million in December.

Crypto.com’s report estimates that “If we extrapolate a similar rate of increase in 2022, we are on track to reach 1 billion crypto users by the end of 2022.”