Citi GPS Report: Metaverse Economy Could Be $10 Trillion Plus, Magnifying Legal and Regulatory Challenges of Web2
Citi has released a report titled Metaverse and Money: Decrypting the Future, estimating the target addressable market for the Metaverse economy at over $10 trillion. The report indicates potential users could range from 1 billion (using VR/AR devices) to 5 billion (mobile users). It discusses the challenges of accessing an immersive internet experience, including the need for improved latency and network bandwidth, particularly with only 25% of the global population expected to access 5G by 2025. The report also explores the evolving legal and regulatory landscape surrounding digital currencies in the Metaverse.
- Estimated target addressable market for the Metaverse economy exceeds $10 trillion.
- Potential user base estimated between 1 billion to 5 billion, indicating significant market opportunity.
- Only 25% of the global population is projected to have access to 5G by 2025, which may hinder the Metaverse experience.
- Legal and regulatory challenges remain unresolved, which may impact the adoption of digital currencies.
“We estimate, in the report, the target addressable market (TAM) for the Metaverse economy to be in the range of
The Metaverse may be the next generation of the internet. It would combine the physical and digital world in an immersive manner. Gaming, commerce, art, media, advertising, smart manufacturing, health care, virtual communities, social collaboration, including for enterprise and education, are among some of the likely use cases in addition to everything we use the internet for today.
In the foreseeable future, an immersive internet experience for most users will likely be accessed via their mobile phones and only a subset of the Metaverse participants will use VR devices, despite expected improvement in VR/AR usability.
However, to build an envisioned Metaverse experience, latency needs to improve and faster connectivity speeds are needed. With only
The Metaverse of the future would encompass more digitally-native tokens but traditional forms of money would also be embedded. Money in the Metaverse could exist in different forms, i.e., in-game tokens stablecoins, central bank digital currencies (CBDCs), and cryptocurrencies. In addition, digital assets and NFTs, in the Metaverse will enable sovereign ownership for the users/owners and are tradeable, composable, immutable, and mostly interoperable.
If most users access the Metaverse via a mobile phone, the operating system (OS) will be the same. Consumer hardware manufacturers will be portals to the Metaverse and potential gatekeepers. Similar to today, there will likely be a split between a
Importantly, from a legal and regulatory perspective, there is a lot to work out. If the Metaverse(s) is the new iteration of the internet, it will attract great scrutiny from global regulators and policymakers. All the challenges of the Web2 internet could magnified in the Metaverse, such as content moderation, free speech, and privacy. In addition, a blockchain-based Metaverse will brush up against still evolving laws around cryptocurrencies and decentralized finance (DeFi) in many jurisdictions around the world.
About Citi Global Perspectives & Solutions (Citi GPS)
As our premier thought-leadership product, Citi Global Perspectives & Solutions (Citi GPS) is designed to help our clients navigate the global economy's most demanding challenges, identify future themes and trends, and help our clients profit in a fast-changing and interconnected world. Citi GPS accesses the best elements of our global conversation and harvests the thought leadership of our research analysts and a wide range of senior professionals across our firm.
About Citi:
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Source: Citi
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