Payment Services Face New Demands with the Rising Metaverse Trend
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The metaverse could place new demands on payment services that may be better met by central bank digital currencies and retail faster payment systems than by crypto, according to a Bank for International Settlements report.
A 2022 Citi report predicted that the Metaverse economy could be worth up to $13 trillion by 2030.
While the buzz has since subsided, the BIS says that if the metaverse does succeed there will be important implications for the digital economy that will see new demands on payment services, “for instance that they be fast, programmable and cross-border”.
Metaverse promotors such as Meta have talked up the role of cryptocurrencies and stablecoins. However, the BIS paper argues for the importance of competition, interoperability, consumer protection and data privacy.
With this in mind, CBDCs and interlinked domestic fast payment systems could prove better options. The paper also raises the potential of tokenised deposits, or digital representations of commercial bank deposits in a programmable platform.
“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,” conclude the authors.
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