Metaverse is a virtual world created by simulating real life. Three-dimensional technology has enabled us to do activities in cyberspace as in real life, from shopping to playing, socializing and working.
By
A Prasetyantoko
·5 menit baca
ADITYA DIVERANTA
Front view of Gatuk Indarto's WinCash Wallet application which was deactivated when accessed on Wednesday (1/12/2021). The app becomes a digital wallet where WinCash Coin crypto assets are transacted.
Recently, there was news of a virtual sale of the North Square of Yogyakarta city with cryptocurrency on the NextEarth page. Lately, a student, Sultan Gustaf Al Ghozali, earned Rp 1.5 billion (US$104,000) from the sale of his photo in the form of an NFT (non-fungible token) on OpenSea. This phenomenon marks the presence of a rapidly grown metaverse economy in recent times.
In October 2021, Facebook Inc CEO Mark Zuckerberg announced the change of his company name to Meta Platforms Inc. Since then, the discussion of the metaverse has grown. The idea of the metaverse is not new. The revolution of the digital technology ecosystem has made it possible.
The term metaverse was used by Neal Stephenson in 1992 in the science fiction novel “Snow Crash”. This idea has also been applied in various games with the help of virtual reality and augmented reality.
Metaverse is a virtual world created by simulating real life. Three-dimensional technology has enabled us to do activities in cyberspace as in real life, from shopping to playing, socializing and working. In that virtual world, we are avatars.
In economic activity, products (goods/services) need to be certified through NFTs, then traded in cryptocurrencies. Cryptocurrency is a certification of the “mining” technology as an underlying guarantee of its value. All these activities are authentically recorded in a decentralized open network called a blockchain.
The metaverse economy, especially crypto assets, will be an important challenge for authorities, especially monetary institutions in maintaining the stability of the (real world) financial system.
"Cryptoization"
The market capitalization of crypto assets has increased rapidly. By May 2021, the value of the crypto assets reached $2.5 trillion, triple the total recorded value at the beginning of the year. In addition to the increase in the volume of its use, the price is highly fluctuating.
The International Monetary Fund’s Global Financial Stability Report, October 2021 was titled “Covid-19, Crypto, and Climate: Navigating Challenging Transitions”. The first part of the report provided an overview of developments in global financial stability and market marked by the disruption of the global supply chain followed by rising inflation. As a result, the vulnerability of the non-bank financial sector increased, while the recovery of the corporate sector was uneven.
In conclusion, although the proportion of assets is relatively small compared to other assets, its development needs to be closely monitored.
The second part assessed in particular the opportunities and challenges of the development of the crypto asset ecosystem that began to emerge in 2008, in response to the global financial crisis. Ten years later, the Financial Stability Board report (October 2018) showed crypto assets were not yet considered a risk to be reckoned with. However, the Covid-19 pandemic has accelerated its use so that financial authorities have to pay attention.
In comparison, the total value of the subprime mortgages that triggered the 2008 financial crisis was only $1.2 trillion. Meanwhile, the value of crypto assets in November 2021 had exceeded $3 trillion. In conclusion, although the proportion of assets is relatively small compared to other assets, its development needs to be closely monitored.
kompas-photographer-name
A man watches the prices of bitcoin at Bithumb cryptocurrency exchange in Seoul, South Korea, Wednesday, June 20, 2018. Bithumb, South Korea's second-largest exchange, said Wednesday that $31 million worth of virtual currencies have been stolen by hackers, a latest in the series of recent hacks that raised security concerns.
The conclusion is based on several things. First, the variety of crypto assets continues to increase and the volume also continues to grow. The development of the metaverse will increase the role of crypto assets in the future. Second, the purpose of crypto asset ownership has also become more varied, ranging from speculative investments, currency conversion, to payments.
Third, according to various studies, the correlation of crypto asset movements with other investment instruments is also getting tighter. It means that crypto assets have become an alternative investment portfolio in the financial sector. Ultra-loose monetary policies have flooded the financial markets with abundant liquidity driving crypto assets into investment alternatives.
As a result, the financial sector developed rapidly, followed by various financial product innovations, or what was known as the period of financialization.
From historical experience, every major crisis is always followed by important developments. After the oil crisis in the late 1970s, the convertibility of the exchange rate (US dollar) to gold was eliminated. As a result, the financial sector developed rapidly, followed by various financial product innovations, or what was known as the period of financialization.
After that, the symptoms of digitalization began to appear. And now, there is the phenomenon of cryptoization.
Cryptocurrency and the metaphysical economy are technology-based and dependent on creativity and innovation. Apart from its potential, there are also risks, particularly related to consumer (data) protection, prevention of money laundering and terrorist financing. Therefore, a smart regulatory approach is needed but there is still room for creativity and innovation.
kompas-photographer-name
A picture shows the first Italian Bitcoin crypto currency shop "Bitcoin Compro Euro" (meaning I Buy Euro), on December 11, 2017 in Rovereto, northern Italy. Bitcoin surged past $18,000 after making its debut on a major global exchange but was trading lower on December 11, 2017, highlighting the volatility of the controversial digital currency that has some investors excited but others nervous.
First, there is a need for an integration of surveillance systems in one architecture. In Indonesia, crypto money is not accepted as a means of payment, but can be used as an investment asset under the Commodity Futures Trading Supervisory Agency (Bappebti) of the Trade Ministry.
Although it is not accepted as a means of payment, crypto money can be exchanged for official money (fiat money). Therefore, it is necessary to involve the financial authorities, particularly Bank Indonesia (BI) and the Financial Services Authority (OJK), in addition to the Communication and Information Ministry, which oversees the technology ecosystem.
Second, there is a need for coordination at the global level because cryptocurrencies and the metaphysical economy do not recognize state legal jurisdiction. They have their own world. Their presence could be a form of a criticism of the lack of coordination among countries following the trade war and pandemic. Indonesia's role in the G20 presidency is very important in building global coordination in anticipation of the emergence of a metaphysical economy that increases the use of crypto money.
kompas-photographer-name
A Prasetyantoko
The metaverse phenomenon shows the possibility that the world will not simply return to its prepandemic situation. The post-pandemic world will move in another direction.
A Prasetyantoko, Rector of Atma Jaya Catholic University.
(This article was translated by Hendarsyah Tarmizi).
