Decrypting Crypto

• 33% of children aware of cryptocurrency reported that although they hadn’t yet, they would invest in it.
• Similarly, 27% of children who knew about NFTs reported that although they hadn’t yet, they would engage with them.

It’s not just for immediate gratification; most kids who invest or would invest in cryptoassets said it’s to invest in their future. Wider benefits include feeling part of a community and learning about how to manage their finances.

• 49% of children who had invested or would consider investing in cryptocurrencies reported that they perceived it as an investment for the future.
• 48% of children who had invested in or would consider investing in NFTs stated that they believed NFTs represented the future of money.
• Key benefits identified by our desk research include fun and customised online experiences, becoming part of a community and improved financial and digital literacy.

Our survey respondents believed that it’s a market rife with scams. This means that users are at risk – especially children. However, this was not necessarily stopping them from participating.

• Parents and children made a similar assessment of the risks involved with engaging with cryptocurrency and NFTs, with 49% of parents and 46% of children identifying falling for scams or fraud as the main concern.
• Key risks identified by our desk research include being exposed to scams and counterfeiting, financial risk and the pressure to engage.

While there have been advancements in regulatory efforts within the cryptoasset realm, it is evident that the issue of safeguarding children’s interests has been overlooked. This oversight needs to be addressed and rectified.

• Children should be given due consideration by policymakers when formulating forthcoming regulations concerning cryptoassets, rather than treating their needs as a secondary concern. This would involve new regulations keeping pace with advancements in the financial technology area. Despite the impact financial harm can have on children’s lives, it is mostly out of scope of the Online Safety Bill, with the exception of
  paid-for scam ads.
• There needs to be more regulatory alignment and cooperation in this area to ensure a consistent approach is applied. This would involve a wider join up between the Advertising Standards Authority (ASA), the Financial Conduct Authority (FCA) and Ofcom.
• The ongoing involvement of parents and professionals, such as teachers, in this realm is of significant importance. This underlines the relevance and value of media literacy strategies from DSIT (formerly DCMS) and Ofcom. Furthermore, through the Fraud Strategy, the Government has committed to new anti-fraud lessons for young people. These could be delivered through the RSHE curriculum (which is undergoing review) and include a focus on online scams and cryptoassets.