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The Financial Industry Regulatory Authority (FINRA) recently published a report on the potential implications of the metaverse for the financial sector. The report highlights the possible benefits of the metaverse, including visualization of data, creation of digital assets and virtual trading, and projects that it could drive $800 billion in global revenue by 2024 and contribute $3 trillion to the global GDP by 2031. However, it warns about challenges such as security and privacy and emphasizes the need to comply with existing regulations even in virtual environments.

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So, here’s the scoop! The Financial Industry Regulatory Authority (FINRA), an independent entity which isn’t part of the government, recently put out a report focusing on what the metaverse could mean for companies in the financial sector.

They give a low-down on how the metaverse (think virtual reality landscapes and online alter-realities) is shaping up in the finance world and speculate on its future. An important point they make is that the rules they have, and other relevant laws, apply in the metaverse just like they do in real life.

According to their report, the metaverse could be a cash cow with global revenue estimated to hit $800 billion in 2024, and it could add a whopping $3 trillion to global GDP by 2031. Woah!

While most people associate the metaverse with gaming, FINRA looks at how it could be used in finance – for visualizing data, creating digital twins (meaning digital replicas of physical assets), and virtual trading.

But it’s not all rainbows and unicorns. They highlight several challenges too, with security and privacy being the biggest. Given that the concept of a metaverse is still a bit of a murky area which covers a lot of tech avenues, it’s crucial to make sure different platforms meet the regulations needed for financial institutions, brokers, and dealers for the metaverse idea to take off smoothly.

They underscore that even though many businesses are just dipping their toes into the metaverse, they should remember that it doesn’t mean they can forget about the rules: they still need to comply with the same legal requirements as in real life.

As per the report, “FINRA reminds its member firms that FINRA’s rules—which are intended to be technology neutral—and the securities laws more generally, continue to apply if member firms use the metaverse in the course of their businesses, just as they apply when member firms use any other technology or tool. Using any given technology does not absolve firms of their regulatory obligations.” Be mindful, folks!

Source: Cointelegraph