The growth of an open and decentralized metaverse may scale up the existing risks from crypto assets and could cause financial instability in the real world, according to the Bank of England.
Despite reiterating the volatile nature of cryptos’ amplification of losses due to overleverage, Bank of England researchers Owen Lock and Teresa Cascino stated that while the metaverse is in the early stages of development, it has become a hub for users to gain new experiences, including shopping and digital concerts and a new platform for handling cryptos.
Metaverse Risks
According to the researchers, households may spend more of their money in crypto assets if a substantial open-metaverse were to emerge and corporations might accept more payments in crypto assets for …
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