New generations are increasingly interested in cryptocurrency. For example, according to Rick Reeder, director of fixed income instruments at BlackRock, millennials perceive cryptocurrency as a real digital payment system. And the challenge in TikTok, popular with young people last summer, led to a 140% increase in the value of Dogecoin.
Having received his first cryptocurrency, the child will immediately want to use it somewhere and will face difficulties. In Russia, digital money cannot be a means of payment, so it cannot be spent in online stores, not to mention offline trading platforms, says Maria Agranovskaya, managing partner of the GRAD Bar Association.
This is a prosaic, but it is necessary to tell the child about that, and about the risks: exchange rate may go down, volatility is not regulated in these markets, there may be all sorts of unfair rules of the game – which are prohibited for the stock market”, – said Agranovskaya.
Cryptocurrency and the law
The law does not prohibit minors from mining and purchasing cryptocurrency, added Maria Agranovskaya. The only problem a child can face, she says, is buying mining equipment. Teenagers from 14 to 18 years old, on the basis of the Civil Code, can conduct any transactions with the written consent of their parents. Also, the legislation allows them to independently, without the consent of their parents, adoptive parents and trustee, dispose of their earnings, scholarships and other income. Children under 14 do not have this right.
Starting from the age of 14, teenagers are already able to direct their actions when buying items not only for purely household purposes, explained Artem Denisov, Managing Partner of Genesis Law Firm.
It is necessary to convey to the child that cryptocurrency is a speculative asset, therefore it cannot be considered as a substitute for fiat currencies, recommends Yulia Kolbasova, founder of Almanax Education. According to her, despite the lack of financial literacy lessons, there is a phenomenon of schoolchildren-traders in Russia and other countries. At the age of 14, some teens may have an impressive investment portfolio. Usually, these children are backed by financially active parents who are open to financial dialogues with their children and provide some freedom in this regard. They don’t teach that at school, added Kolbasova.
“It is important to teach how to spend money in an interesting and useful way in order to form a taste for making money and investing, to tell the basics of increasing money – at this point they will know what an asset is and what a liability is. An asset is something that grows over time, or makes money right now. In this sense, cryptocurrencies are the same asset, ”notes the founder of Almanax Education.
The expert emphasized that cryptocurrencies already today allow teenagers to experiment, as well as learn trading and investing from their own mistakes and lose very small sums of money.
“Having bought a little-known altcoin today at a price of less than a dollar, in a year it can show an increase of hundreds of percent. Of course, there will be assets that will bring a loss, but this should be considered as a financial experience, ”said Kolbasova.