ANZ banking services lead Nigel Dobson is taking a keen interest in the metaverse as a place where some of the bank’s customers want to be and transact in, but sees “really key questions” that need answers as the space takes off.
Speaking during a Trans-Tasman Business Circle panel, Dobson said the metaverse, a connected network of virtual communities built on blockchain platforms, is “one that traditional supporters of the digital economy like banks should be planning for”.
Dobson predicted that while current excitement about the metaverse will “flatten out eventually, the hype precedes the genuine foundation of business models” and is 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 “technology leading regulation”, creating “a classic problem we’ve been trying to catch up with and deal with for many decades now”.
In particular, he said that current notions of digital identity “are probably not sufficient to appropriately govern and manage the safety [of participants] in the metaverse.”
“I’m no expert in the space, but I think there’s a lot of work that needs to be done in that space to ensure that we do bring some sort of trade-off between anonymity and privacy to accountability,” he said.
Dobson said information sharing arrangements across blockchains would become important so as to “allow individuals in their virtual form to move between various worlds and potentially even transfer assets between those worlds.”
“In order to do that, you’ve got to have an underpinning set of standards [and] have an underpinning sense of governance and a well woven together legal frameworks that span the globe,” he said.
“Now, most countries do not make global laws – and yet we are dealing with a borderless phenomenon here in decentralised venues, or the metaverse.”
“That’s one of the things that the regulators will have to catch up with” as they seek a best practice approach to standards-setting “across these different worlds”.
“These are all questions I have no good answers to… the regulators need to stand in front of this” to clearly define regulation jurisdictions, he said.
“Otherwise, we will not move forward and the metaverse will become a dangerous place. Which if it does, then commerce will cease to exist.
While “that’s making a very definitive statement”, Dobson said “those sorts of questions need to be answered” if the metaverse is to ever scale.
Dobson added “the use of smart contracts on-chain secured with native coins that can be issued by a bank is a really important development.”
“At ANZ, have already created a stablecoin that can interact on a range of blockchains called A$DC.
“It’s a tokenised 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’re working with customers” as it recently established beverage maker “Naked Life in Decentraland and set them up as a merchant in the virtual world”.
“Wherever your customers want to do business, you should be interested in,” said Dobson.
‘Fundamentally, if the business models that you recognise are transitioning to a different operating model that your customers feel comfortable in those environments, then we want to be there and we want to be testing and learning alongside them.”