ANZ Banking Services Lead Nigel Dobson has a keen interest in the metaverse as a place where some of the bank’s customers want to be and transact, but sees “really important questions” that need answers as the space expands.
Speaking at a Trans-Tasman Business Circle panel, Dobson said the metaverse, a connected network of virtual communities built on blockchain platforms, “is one that traditional digital economy proponents like banks should be planning for.”
Dobson predicted that while the current excitement about the metaverse “will eventually level off, the hype precedes the real foundation of business models” and represents an opportunity to find a business model “that makes sense.”
However, he said the metaverse is “just an exponential version of what’s already happening on the internet” with “tech-leading regulation”, creating “a classic problem that we’ve been trying to catch up and tackle for decades.”
In particular, he said current notions of digital identity are “probably not sufficient to properly govern and manage security”. [of participants] in the metaverse.”
“I’m not an expert on space, but I think there’s a lot of work that needs to be done in that space to make sure we kind of make a tradeoff between anonymity and privacy to be accountable,” he said.
Dobson said information sharing arrangements on blockchains would become important to “allow individuals in their virtual form to move between different worlds and possibly even transfer assets between those worlds.”
“To do that, you have to have an underlying set of norms [and] have a supportive sense of governance and well intertwined legal frameworks spanning the globe,” he said.
“Now most countries don’t make global laws — and yet here we are dealing with a boundless phenomenon in decentralized locations, or the metaverse.”
“That’s one of the things that regulators will have to catch up with” as they look for a best practice approach to setting standards “in these different worlds.”
“These are all questions that I don’t have a good answer to… the regulators need to stand up for this” to clearly define regulatory jurisdictions, he said.
“Otherwise we will not progress and the metaverse will become a dangerous place. And if so, then the trade ceases to exist.
While “that’s a very definitive statement,” Dobson said, “questions like that need to be answered” if the metaverse is ever going to scale.
Dobson added: “Using smart contracts on-chain secured with native bank-issued coins is a very important development.”
“We have already created a stablecoin at ANZ that can communicate on a series of blockchains called A$DC.
“It’s a tokenized version of Australian dollars and it’s built to interact with digital assets like NFTs”.
Dobson highlighted ANZ Worldline Payment Solutions, the bank’s joint venture with European payments company Worldline, as an example of “how we work with customers” as it recently launched drinks maker “Naked Life in Decentralland and set them up as a trader in the virtual world”.
“Wherever your customers want to do business, you should be interested in that,” says Dobson.
“If the business models you recognize move to a different business model where your customers feel comfortable in those environments, then essentially we want to be there and we want to test and learn with them.”