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This comes after HSBCS’ notice to stop payments to cryptocurrency exchange Binance Group, whose activity is unregulated by the Financial Conduct Authority (FCA), due to concerns about the potential risks to its customers.
Read this Commercial Question to find out what the metaverse is: ‘The metaverse and trademarks’.
What is The Sandbox?
The Sandbox is a blockchain gaming platform that caters to sports and gaming fans in the metaverse. There are many worlds in the metaverse, for example, JP Morgan has opened Onyx Lounge in the Decentraland, which is a blockchain metaverse.
The Sandbox, like other metaverses, enables users to create, sell, use, and construct their own virtual reality using non-fungible tokens (NFTs). NFTs are crucial in the metaverse as they enable users to buy and sell virtual land for profit. NFTs will allow users to prove their ownership of land, such as a plot that has recently been purchased by HSBC.
To find out more about NFTs, read my previous LCN Blog: ‘The laws of music: the rise of fan-crazed NFTs’.
Data protection law serves as an example of an area of law that will be affected by a bank's transition to the metaverse. If banking customers are storing their accounts (including their passwords and face recognition tools) in banks such as HSBC on the metaverse, then a range of data about the customers’ environment, will require compliance. This is to ensure that customers can bank within the metaverse in accordance to Article 9 and Article 15 of the GDPR.
To find out more about NFTs, read this Commercial Question: ‘NFTs and copyright infringement: Miramax versus Tarantino.’
Customer data in the metaverse will become increasingly more difficult to protect which will inevitably place pressure on regulators such as the FCA. As more banks acquire plots in the metaverse, banks will face a duty of care to ensure the protection of their customers’ data and monies.
Read this LCN Blog for a deeper insight into the metaverse: ‘What is the metaverse and why do lawyers care?’
HSBC’s move to the metaverse will create virtual experiences for current and future customers. Banking on the metaverse will elevate the customer experience by amplifying the accessibility of banks to drive meaningful interactions using AR/VR channels without attending a branch in person.
Looking to the future, real estate sales in the metaverse could see realtors providing banks such as HSBC a virtual tour of the land that they’re purchasing in the metaverse and even provide other banking services such as mortgage advice on the metaverse in real-time.
From banks to law firms – the metaverse is not new
Surely, if banks and other major corporations such as Microsoft are making the move onto the metaverse, it won’t be long until more major law firms follow suit. Interestingly, Fieldfisher (then known as Field Fisher Waterhouse) became the first major international law firm to open a virtual office on Second Life in 2007.
Although we are currently in a phase of limited understanding of the metaverse, opportunities in the metaverse for law firms and their banking clients do exist, and it’s likely that other opportunities will arise in the future, alongside arising legal issues.
And the issues are clear: the metaverse continues to present jurisdictional issues, coupled with the opportunity to reidentify ownership and create new banking products and service opportunities.
Therefore, it’s likely that we will soon develop an understanding of what is allowed and prohibited on the metaverse to realize the opportunities that are available on the metaverse for the legal industry.