Mauritius’ Financial Services Commission (FSC) is considering an integration of the metaverse into its payments ecosystem to position the country to reap the positive rewards of digitization.
The FSC made its stance known in a 22-page paper exploring the potential use cases and flaws associated with linking digital worlds built on blockchain. To gain clarity into a planned integration, the FSC launched a month-long public consultation urging stakeholders and academics to contribute to the discussions through seven key questions.
The FSC’s questions ranged from the short-term impact of the metaverse on the financial services sector to the potential hurdles in providing financial services in the metaverse. The Commission said the responses will form the bedrock for future regulatory frameworks guiding the integration of the metaverse with Mauritius’ financial system.
Participants have until November 30 to offer their responses, with the FSC plotting to establish a “multidisciplinary working group” to spearhead its ambitious objectives.
The FSC identified several use cases for the metaverse, noting that promoters can set up virtual storefronts, create immersive experiences, and provide opportunities for stakeholders to simulate financial scenarios.
“Complex financial models can accordingly be visualised in 3D, enabling better understanding and decision-making,” said the FSC. “Investment dealers, advisers and portfolio managers can effectively immerse themselves in realistic simulations, helping them to anticipate market movements and make informed choices.”
Despite the seemingly obvious benefits of the metaverse, the FSC’s paper took a balanced approach, reeling out potential risks associated with digital worlds. The paper mentioned the challenges of digital asset vulnerabilities, cybersecurity risks, server outages, content moderation, and false information.
In addition to rolling out a public consultation, the FSC says it will benchmark its attempts with the models adopted by foreign jurisdictions. The FSC pointed to key initiatives rolled out by the European Commission, Dubai, the U.K., South Korea, Singapore, China, and Indonesia, hinting at mirroring their efforts to “uphold fundamental values of consumer protection and individual empowerment.”
CBDC plans in motion
Meanwhile, Mauritius is set to launch a central bank digital currency (CBDC) pilot in November after over three years of preliminary studies. Although not formally confirmed, there are plans that the proposed CBDC may find use cases in the metaverse and decentralized finance (DeFi) as part of plans by the Bank of Mauritius (BoM) to revolutionize payments in the country.
“As a central banker, I need not stress upon the determining role that CBDCs can play, not only in protecting monetary sovereignty but also in assisting central banks and regulatory authorities on the front of AML/CFT,” said BoM Governor Harvesh Kumar Seegolam.
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