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- Metaverse is an alternate digital world accessible through AR, VR, and MR techs.
- Businesses are seeing this space as a growth opportunity.
- Companies like Adidas, Nike, Samsung, etc. are already in the space.
What Will Finance In Metaverse Look Like?
Metaverse is a flourishing digital world that is attracting a lot of eyes including the top guns and organizations across the globe. The space has proved its worth by exhibiting its potential to conduct routine maneuvers and generate income through various activities. Whether it is fashion, sports, entertainment, or any sector, there is always room for one more here.
There was a time when people needed to stand in long queues just to deposit or withdraw their money, but as technology advanced, it became as easy as a click of a button. Now that we have witnessed financial institutions like Morgan Stanley, JPMorgan, and Standard Chartered, it is important to know how this digital space can influence the financial space.
NFT and Cryptocurrency
Cryptocurrencies are going to play a vital role in Finance in Metaverse. Like physical money has a utility in the real world, digital assets will have a utility in the virtual world. People will transact through these assets in the metaverse. In the case of NFTs, financial institutions can offer tokens to receive premium benefits. If a Non-Fungible token is expensive, banks can use them as collateral against loans.
Crypto Wallets
Almost all the banked population across this globe uses a digital wallet to store their funds or make payments. Crypto wallets in metaverse will work similar to these digital wallets, but they will store cryptocurrencies instead of fiat money. Another possibility is that the banks may allow the users to store crypto and fiat within the same account.
Loans For Virtual Lands
As metaverse is a digital replica of this physical world, it contains virtual land plots that users can buy. Finance in the metaverse raises a possibility that the banks will offer loans to take over digital plots just like they offer in the persisting financial system. If the user fails to pay the loan back, the land plot can be seized by the institutions, just like in the real world.
As per JP Morgan’s assessment during 2021, the average digital land plot value doubled from $6,000 in June 2021 to $12,000 in December 2021.
New Vs. Old Organizations
We have mentioned above that financial institutions like JP Morgan, Standard Chartered, etc. are already making use of this space. They may grow the scale of their operations as the user base in the sector grows. Remaining financial institutions might enter the virtual realm or better, new organizations will emerge which will operate purely inside the metaverse instead of the real world. Sure they can open physical branches in the tangible world.
Final Thoughts
The metaverse is a place of limitless possibilities where only the sky’s the limit. We believe that it will only make financial space better. The future iteration of the internet is only focused on improving the current framework we are witnessing today. Though we don’t know what exactly the metaverse will bring (deep down we know), we can bet on one thing, that it will change whoever enters this breathtaking universe.
Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.
