Digital Currency Issues in the Metaverse

Abstract

The developing metaverse reconfigures the financial landscape, offering an economic system with digital currency in its virtual orb. The metaverse is a virtual universe consisting of augmented and virtual realities, where an individual interacts digitally with other like-minded participants. Digital currency is a payment source for digital platform transactions and is exchangeable in physical currency. Using digital currencies, an individual performs transactions, shopping, gaming and purchases and consumption of various goods and services in the metaverse. For example, prominent forms of digital currencies in the metaverse are cryptocurrency, non-fungible tokens (NFTs) and central bank digital currency (CBDC). The metaverse is an emerging concept that has received significant attention in different industries, including finance, services and retail. For example, Allied Bank Limited opened its first branch in the metaverse to facilitate the virtual consumer. Similarly, retail brands (e.g., Gucci, Nike and McDonald’s) have invested resources to build a virtual world within the metaverse and use digital currencies to earn a profit. The metaverse is still nascent, and many other digital interactive technologies offer ways to form an immersive space within the metaverse. However, the metaverse comprises four primary characteristics: intimation of the real world, expandability, immersive interaction and socialization.