- The report, prepared by FINRA’s Office of Financial Innovation, explores the rising influence of the metaverse on the securities industry. FINRA is seeking comments from firms, market participants and others currently exploring the metaverse: comments are requested by March 14, 2025.
- The metaverse is described as a blend of digital and physical experiences, enabling continuous user interaction. Major financial institutions are exploring metaverse applications, driven by projections that it could significantly boost GDP and digital engagement.
- The report highlights innovative applications within the financial sector, such as enhanced data visualization, virtual trading environments, digital twins for replicating physical assets, payment systems favoring crypto, training simulations, and immersive investor education platforms. Firms are also leveraging the metaverse for marketing and customer engagement, especially targeting younger investors accustomed to digital environments.
- Adoption hurdles include high infrastructure costs, data privacy, cybersecurity, and the need for advanced interoperability between metaverse platforms. Issues around decentralization also emerge as firms decide between controlled, centralized platforms or community-driven, decentralized environments.
- FINRA emphasizes that existing securities laws apply to metaverse activities, cautioning firms to assess how their metaverse strategies align with compliance obligations. Topics like record-keeping, financial advice, and identity verification remain paramount, with the report encouraging firms to seek interpretive guidance from FINRA on ambiguous regulatory matters.
