METAVERSE
DO LEGACY FINANCIAL INSTITUTIONS HAVE A PART TO PLAY IN METAVERSE PAYMENTS ?
“ If consumer interest in metaverse transactions continues to increase , banks and other financial institutions will rise to the occasion , offering easy and secure payment solutions , translating real-world trust into the virtual realm .”
Are CBDCs a viable digital payments option for the metaverse ? It is , perhaps , that banks and central financial institutions are already rising to the occasion , experimenting with CBDCs as a more trusted form of digital payment to rival cryptocurrencies .
Transact365 CCO Scott Major says that while “ the metaverse is driving CBDC development to some extent … the preferred payment method remains uncertain due to regulations and conflicting views on central banks and decentralised tokens .”
With the metaverse ’ s economic system set to be totally digital , Armalytix ’ s Executive Chairman of UK Source Funds and AML Checks , Mike Ward , looks at the challenges traditional banks face in accessing the space .
“ A critical issue that financial institutions encounter is related to KYC ( Know Your Client ) and AML ( Anti-Money Laundering ) regulations . Whether the payment is made with fiat currency or metaverse money , regulated financial institutions will need to conduct KYC checks on their clients .
“ Alternatively , they may need to establish partnerships with other regulated financial institutions that can perform these checks on their behalf before processing the payment .
“ Furthermore , metaverse money operates beyond national borders , posing additional challenges . Regulated financial institutions are not authorised to receive or make payments to individuals or entities in certain countries .
“ They may be restricted to acting solely within their own country of domicile . Determining the country of origin within the metaverse poses a significant hurdle . Violations of these rules could result in severe punishments from regulators , and in some cases , even criminal penalties .”
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