UNICEF warns of a threat to children from unregulated cryptocurrencies

The United Nations Children’s Fund (UNICEF) has urged including cryptocurrencies and digital assets in online-child-protection initiatives due to the threats posed by their unregulated nature.

In the отчете “Prospects for Children in 2022: A Global Outlook,” UNICEF analysts analysed trends that will influence child protection. One of them was the widespread adoption of digital currencies.

Experts noted the 2021 boom in the crypto market, rising research on CBDCs and the acceleration of the digitisation of the financial sector amid the pandemic. According to the document, the number of mobile money accounts in Latin America alone rose by 67% over the year.

The foundation’s experts said the “revolution” will continue:

“Public blockchain applications, such as DeFi, are likely to reach greater maturity and become viable alternatives to traditional financial markets.”

Indications of the pace of cryptocurrency adoption include Mastercard and Visa in this area, UNICEF noted. In 2022, 40% of global consumers planned to use digital assets, the foundation’s experts added, citing survey results.

The development of the industry may face regulatory challenges amid varying government approaches. China, for instance, banned cryptocurrency operations in favour of a state alternative—the digital yuan. India is seen as willing to follow a similar path, according to UNICEF. The United States and the European Union are using their own regulatory approaches.

The foundation also sees the potential emergence of alliances among governments, large banks, and investment firms opposing blockchain-based finance in several countries.

“Ultimately, these processes will require the emergence of national and international regulatory frameworks,” the experts say.

In their view, the greater reach of financial services from digital innovations could bring benefits to families worldwide, including cheaper remittances and “fast, transparent and efficient social‑assistance programs.”

“On the other hand, unregulated cryptocurrencies pose a threat to the stability of financial systems, to government revenues on which benefits depend, and directly to children when they facilitate unchecked transactions underlying child trafficking, sexual exploitation, the sale/purchase of illicit content, fraud and extortion,” UNICEF said.

Back in 2019, the organisation established a fund to accept donations in Bitcoin and Ethereum. France’s UNICEF office had already begun receiving donations in nine cryptocurrencies.

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