The Bank of England called for tighter regulation of the metaverse

Bank of England analysts believe that the development of the metaverse market is forcing global regulators to develop laws that prevent systemic risks for the financial system.

Regulators need to be aware of the systemic threats posed by wider use of the metaverse and be prepared to mitigate those risks, analysts said. In their opinion, the further development of the metaverse increases the existing risks associated with cryptocurrencies and financial stability.

Economist Owen Lock and political analyst Teresa Cascino expressed concern about the rapid development of the metaverse:

“The widespread adoption of cryptocurrencies in the metaverse or in any other setting will require a strong regulatory framework for consumer protection and financial stability.”

According to the researchers, the global metaverse will allow households to store most of their savings in cryptocurrencies, and companies will be able to accept payments in digital assets. Financial institutions and banks may decide to increase their market share in the crypto industry.

However, Bank of England researchers believe that industry specialists may lose their jobs if investors’ interest in digital assets falls, as this will reduce activity in the metaverse.

“Therefore, an important step for regulators is to address the risks associated with the use of crypto assets in the metaverse before they reach systemic status,” the researchers said.

The Bank of England, the International Financial Stability Board (FSB), and the Basel Committee on Banking Supervision (BCBS) have long called for the establishment of standards and rules to limit potential crypto risks.

Roskomnadzor believes that the globalization of the metaverse will contribute to the illegal trade in cryptocurrencies, an increase in the number of crimes and “destabilization of the political situation.”