the new financial Eldorado?

It is already on everyone’s lips, it will soon be within the reach of all clicks. The Metavers (metaverse in English) has continued its irresistible rise since the beginning of the year. Object of desire with almost infinite possibilities, it fascinates as much as it terrifies, its functioning and its language are denied to the uninitiated. Reminder of the facts: The metaverse is a virtual and fully immersive universe in which any user can connect through an avatar or a 3D hologram. Within this universe it is possible to buy virtual currency, organize meetings, shop in boutiques, attend a yoga class, a concert… For investors, such a platform is the promise of unprecedented marketing possibilities: advertising, purchases, subscriptions and loyalty. A unique and exciting social experience for users, all without having to leave the house.

The Origin of the Metaverse

The principle of Metavers is known to everyone thanks to fiction. It is first defined in Neal Stephenson’s novel: The Virtual Samurai (1992). A few years later, the choreographed saga Matrix made a cinematic breach in the world of alternate reality. Closer to home, the very ambitious series upload (Amazon Prime) envisioned a unique link between the real world and the afterlife. In the universe of the video game of the mastodons like Fortnite Where Second Life share all the lion’s share. On the network side, in January 2021, to everyone’s surprise, the Facebook group was renamed Meta. Evidence as one of the very clear strategic orientation of this GAFA heavyweight.

But what is new is the financial world’s interest in the metaverse. Gone are the days when this alternate reality — or even augmented reality using a headset — was reserved for geeks locked in their rooms. The Metaverse is trendy! But what changed then? Economic Outlook! Already estimated at $500 billion in 2020, the potential of this market could reach $800 billion by 2024 according to the very serious Bloomberg, or even 2,000 billion by 2030. A niche ten years ago.

Cryptocurrency and the banking sector, two reconcilable worlds?

In the midst of this sudden revival of interest, a few platforms with their own ecosystem stand out: Sandbox, Decentraland and Roblox. For the first two, they revolve around the same blockchain: Ethereum. With this virtual currency, you can split into tokens (Coins), you can buy plots of virtual land to set up your pixelated store or NFT products. The abbreviation stands for Non-functioning tokena non-exchangeable title deed that you can buy with your cryptocurrency.

Until now, it was precisely the advancing shadow of cryptocurrency and the lack of international regulation that kept the financial giants from pushing their investments. A barrier that could soon disappear, according to the ongoing European regulatory project called MiCa (Markets in crypto assets† His goal ? Regulate the market of cryptocurrency players, but also provide it with financial stability and a legal framework to protect its consumers.

Regulation of crypto assets (MiCA): “The European Union is shooting itself in the foot” (Pierre Person, Deputy LaREM)

Pending more clarity, it is a question for the banks not to miss the boat and position themselves to get a slice of the pie before the cryptogist swells it up. JP Morgan and Spanish bank Caixa have bet on Decentraland. On the Sandbox side, we can note the recent investments of HSBC, Standard Chartered or the fintech Kard. With which strategies? Nothing has been decided yet, but the option to open agencies on the metaverse could signal a major overhaul of the customer relationship, as well as the reduction of traditional agencies and thus significant savings on rent (and staff?).

Initially, it will be a matter of traditional banks supporting all metaverse financial microtransactions in a more standardized framework. Facilitate these payments, find them a viable, sustainable and secure economic model for their users. On the French side, time is still hesitant and the big brands are slow to position themselves, waiting for more perspective.

The future will tell if customer demand for the metaverse is as strong as expected, but some major financial groups are already putting their pawns on them so as not to sit on the sidelines when the market booms. It then remains to judge whether the virtual Eldorado was a real gold mine.

European metaverse: let’s be more ambitious Mr Macron!