The Bank for International Settlements calls on governments to regulate the development of the metaverse early on

The Bank for International Settlements (BIS) pointed out in a recent report that the future development of the metaverse still lacks infrastructure. Apart from hardware equipment, it particularly emphasizes that regulatory frameworks and payment services are areas where governments and regulatory authorities can start investing in research early.

Development Infrastructure Needs Improvement for Metaverse

Regulatory Policy Framework for Metaverse

The BIS points out the potential of the metaverse to reshape various sectors such as gaming, e-commerce, and education, but this all depends on ensuring fair access for all, data privacy, and robust consumer protection policies.

In particular, the lack of regulatory consumer protection could undermine the value that the metaverse can create.

To prevent the metaverse from being dominated by private companies and fragmented markets, the BIS emphasizes the need for an effective policy framework that can foster innovation while also protecting users and maintaining the integrity of digital transactions. This is becoming increasingly urgent.

Payment Services Become Crucial Infrastructure

Payment service providers are becoming increasingly important in the metaverse to enable widespread adoption and integration with the real world.

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Payment is crucial for the metaverse to be commercially viable and to promote economic activities. Existing metaverse projects already support various payment methods for direct purchases or transactions.

Another payment option is Central Bank Digital Currency (CBDC), with more and more countries experimenting with it, the impact on the metaverse could become increasingly significant. As metaverse users may be located in multiple jurisdictions, the integration of multiple CBDCs can allow for faster exchange of different users' fiat currencies.

BIS Urges Governments to Regulate Metaverse Early

Although existing metaverse projects have not yet developed sustainable business models and complete products due to market factors and immature environments, and the widespread adoption of the metaverse is not guaranteed.

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However, the BIS points out that the metaverse does have many potential applications, including gaming, education, healthcare, which could have significant impacts on the digital economy. This includes blurring the lines between tradable and non-tradable goods, greater levels of cross-border economic integration, and new demands on payment services, such as programmable and cross-border payments.