FINRA begins a dialogue with financial market participants about the metaverse’s potential opportunities, applications, and risks.

By Jenny Cieplak, Ghaith Mahmood, Stephen P. Wink, Naim Culhaci, and Deric Behar

On October 24, 2024, the Office of Financial Innovation (OFI) of the Financial Industry Regulatory Authority, Inc. (FINRA) published “The Metaverse and the Implications for the Securities Industry” (the Report).

FINRA cited current estimates that around 37.6 million users spend over $28 billion a year in metaverse platforms, with economic growth projected to reach $5 trillion by 2030. OFI therefore consulted with securities firms and other financial institutions, hardware and software providers, academics, industry observers, and government entities to better understand the opportunities and risks that metaverse platforms may present for the US financial industry. The Report outlines OFI’s findings and covers an overview of how it defines “the metaverse,” market trends, potential applications for metaverse platforms that the securities industry is exploring, potential use cases, challenges and related factors associated with metaverse platforms, and potential regulatory considerations.