BIS warns metaverse could put new demands on payments

The Bank for International Settlements (BIS) has warned that if the metaverse picks up it could put new demands on payment services.

The financial institution said that while the technology still falls short of achieving fully immersive experiences and various indicators show interest has fallen in the past two years, if it does succeed it could also blur the lines between the tradable and non-tradable sectors and drive greater cross-border economic integration.

“In principle, retail fast payment systems, retail central bank digital currencies or tokenised deposits could be designed to support services in the metaverse,” said the organisation.

BIS said to prevent virtual environments and money from becoming fragmented and dominated by powerful private firms, public policy would need to support "efficient, interoperable payments and provide clear standards on data privacy, digital ownership and consumer protection".

But it pointed out that while some use cases like gaming, education, and healthcare show promise, others still seem "distinctly gimmicky" like virtual bank branches and land speculation.

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