Headed for the Metaverse – Is Banking Eyeing Virtual Branches?

The Metaverse has the potential to change the way people interact with each other, just as social media did in the early 21st century. But the Metaverse offers opportunities for brands as well, including banks.

Here’s what the Metaverse could mean for virtual banking and how decentralized finance (DeFi) could play a primary role in how transactions take shape.

What is the Metaverse?

The Metaverse is a virtual world or a collection of virtual worlds that users will access through virtual reality headsets, augmented reality applications, and other consumer technologies, like smartphones. It is expected to be similar to social networks in that it will facilitate social interactions in digital space. However, as a completely virtual world, the Metaverse holds immense promise to expand upon how humans interact with each other digitally.

Companies expect to establish a presence in the Metaverse much like they do in the real world and on social media. The Metaverse could host virtual stores, eCommerce spaces, shopping malls, and more.

Brad Yasar, CEO of EQIFi, the first DeFi protocol powered by a licensed bank and one of the first DeFi platforms to get involved in the Metaverse explained that “a metaverse is just going to be another experience people with the required hardware can access. As the hardware components that allow us to immerse ourselves in the metaverse evolve, we will have more immersive experiences. This will enable people to choose between spending time in the physical realm or the virtual experience the metaverse offers us.”

Finance in the Metaverse

Anyone who enters the Metaverse will likely interact with the world as themselves or using an avatar. They’ll be able to engage in social activities, but they’ll also be able to make purchases from businesses and other users. As such, there must be some type of financial infrastructure underpinning the Metaverse.

The Metaverse could play host to traditional financial products, such as loans and investments. It could also usher in a new type of digital economy that exists solely in virtual space. The possibilities are limitless as long as organizations, investors, and users can agree on how to exchange value through the space.

The Prospect of Virtual Bank Branches

Banks are already exploring how they can use new technologies like virtual and augmented reality to engage with customers. However, most traditional banks aren’t fully invested in next-generation financial systems like decentralized finance.

DeFi protocols and digital banks are well-positioned to engage with the Metaverse, and they are likely to begin operating in the virtual space the moment it becomes feasible to do so. This could take a variety of forms.

All or most interactions will occur within a three-dimensional digital space as a virtual world. This means digital banks and DeFi networks could create virtual branches or exchanges within the Metaverse and allow users to “enter” them just like they would a regular bank branch. 

Given what we know about the Metaverse already, the prospect of virtual bank branches is relatively high. The question is what form they’ll take, what capabilities they’ll provide, and how likely people are to use them.

NFTs Will Have a Role to Play in the Metaverse

Non-fungible tokens (NFTs) could potentially serve as a bridge between users and the Metaverse, enabling users to facilitate identity during community and social experiences. NFTs could also help identify ownership of digital products that exist only in the virtual world.

While many NFT offerings currently on the market seem to be more gimmicky than offering anything by way of real value, we are starting to see the tide turn. One noteworthy example of this is the EQIFi NFT card. EQIFi, the first DeFi protocol powered by a licensed and regulated bank, has partnered with PolkaCity to create an NFT card that users will use in the Metaverse. This NFT also allows users to apply for a free bank account with EQIBank, which provides “real world” value.

The Metaverse is coming, and DeFi will play a significant role in its success.