BIS Papers No 144 The economic implications of services in the metaverse by Carlos Cantú, Cecilia Franco and Jon Frost Monetary and Economic Department February 2024 JEL classification: E42, I19, I29, L8, O31, O36. Keywords: metaverse, digital economy, services, payment services, education, healthcare. The views expressed are those of the authors and not necessarily the views of the BIS. This publication is available on the BIS website (www.bis.org). © Bank for International Settlements 2024. All rights reserved. Brief excerpts may be reproduced or translated provided the source is stated. ISSN 1682-7651 (online) ISBN 978-92-9259-739-9 (online) BIS Papers No 144 The economic implications of services in the metaverse 1 The economic implications of services in the metaverse Carlos Cantú,* Cecilia Franco† and Jon Frost‡ Abstract How could an immersive computer-generated environment (“the metaverse”) impact services in the digital economy? Investment in virtual worlds has grown rapidly. Yet the technology still falls short of achieving fully immersive experiences. And despite hyperbolic predictions, various indicators show interest has fallen in the last two years. While some use cases show promise (eg gaming, education, healthcare), others seem distinctly gimmicky (eg virtual bank branches, land speculation). If the metaverse does succeed, it could mean: (i) a blurring of lines between the tradable and non-tradable sectors, (ii) greater cross-border economic integration and (iii) new demands on payment services. In principle, retail fast payment systems, retail central bank digital currencies or tokenised deposits could be designed to support services in the metaverse. 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. Keywords: metaverse, digital economy, services, payment services, education, healthcare. JEL classification: E42, I19, I29, L8, O31, O36. * Senior Economist, Bank for International Settlements (BIS), Carlos.Cantu@bis.org † Senior Macroeconomic Analyst, BIS, Cecilia.Franco@bis.org ‡ Head of Economics for the Americas, BIS and Research Affiliate, Cambridge Centre for Alternative Finance, Jon.Frost@bis.org The views expressed here are those of the authors and do not necessarily reflect those of the BIS. The authors thank the editors Hung-Yi Chen, Nafis Alam and Pawee Jenweeranon, as well as Keith Bear, Sebastian Doerr, Rafael Guerra, Fabian Schär, Christian Upper, Carolina Velasquez, David Vidal-Tomás, Jonathan Warren and Clair Yang for useful comments. We thank Louisa Wagner for help on formatting, Giulio Cornelli for data input and Alison Arnot for editing. All errors are our own. BIS Papers No 144 The economic implications of se...
