The New Economic Models of Metaverse and Its Implications in International Financial Markets

Abstract

In recent years, the term “Metaverse” has gained popularity and attracted researchers and professionals from all around the world due to its rapid adaptation to emerging technologies, such as Web 3.0, virtual reality, and non-fungible tokens (NFTs). Additionally, the Metaverse has not only been integrated with the Decentralized Finance (DeFi) systems to exchange money but also been used to make insurance policies and secure loans, as well as to invest in various financial instruments such as funds and bonds. According to the forecasts of Goldman Sachs, the Metaverse system is expected to reach a US $8 trillion volume in the coming years due to its growing integration with the core functions of the traditional banking system. However, the development of the Metaverse itself is still in the early phases, and the potential risk exposure for the global financial system remains unknown. Therefore, this study seeks to identify the impacts of the Metaverse on the international financial system by focusing on its innovations and opportunities, as well as providing a macro framework for its ecosystem. The present study further analyses the economic advantages and disadvantages of building a blockchain-based decentralized Metaverse. This work is one of the first studies about Metaverse finance and thus offers important implications for financial literature. The findings of the study include valuable information for academics, investors, and policymakers in terms of potential financial and economic risks that the Metaverse may present.