Connect with us

Finance

The new Growth Frontier- Virtual economy

Digital transformation has been on the biggest opportunities, for years now. And for the banks and other financial industries and service providers it has been a headache. With banks constantly competing to meet the ever changing customer expectations around digital services and striving to keep up with the challenger banks which were basically built digitally! The traditional players will always have a lower hand when playing with these digital native players. But in a way that bigger players can carve out a competitive advantage is by looking further ahead, beyond the one-to-two-year timeframe upon which most digital strategies focus. Having a look at the merging trends , it is likely to define the next few years or more to largely un explode the area of opportunity and to stand out is the virtual economy. As the virtual economy emerges, becoming a system on online jobs, virtual assets and exchanges.  It is made up of gaming worlds such as World of Warcraft and Minecraft and non-gaming virtual platforms such as Second Life and Decentraland. It is already big business. The economic activity in these virtual worlds is worth well over $100 billion annually and is growing rapidly.

Financial services within the virtual economy are very rich and diverse, the revenue opportunities lie in the virtual assets. Virtual assets come in all shapes and sizes—including weapons, cars, real estate, “skins”, clothing, characters, accessories, currencies and more. The most expensive virtual asset sale was “Club Neverdie”, a popular nightclub in the game Entropia Universe, which was sold in separate lots for a total value of $635,000 in 2010. More recent examples include a virtual F1 car that sold for more than $113,000 and a “battle cruiser” in the game Crypto Space Commander, which sold for $45,250. The in game items created by publishers and players, the bulk of virtual assets are sold through micro transactions.  To take Fortnite as an example, the average player spends $20 a month on items such as skins and weapons. However, there is a growing market for virtual assets that are “tokenized” on a blockchain—a system in which a record of transactions is maintained across several computers linked in a peer-to-peer network. This latter category, of which the F1 car and battle cruiser are prime examples, is where the biggest opportunities lie. Collectables such as Crypto Kitties are a straightforward early application of NFTs, but users are starting to gravitate towards more complex assets that have genuine utility. Examples also include virtual real estate such as Crypt voxelsand visual art such as Josie Bellinas well as social-network handles, event tickets and even ownership records for physical assets.

The NFT markets still remain volatile and sensitive to the fluctuations in the crypto currencies and the actions of a small number of powerful users. And with the emergence of new exchanges such as OpenSeait’s now possible to establish a live market value and historical price data for virtual assets. Investors are starting to find commercial uses for the NFTs. Virtual cities complete with virtual real estate and virtual designer goods have sprung up and attracted significant investment. One investor, “Matty”, made $60,000 speculating on virtual land.Investments in NFTs also surged as lockdowns took effect in late March and April (when compared with the previous months), generating more than $2.20 million in transaction volume between March 29 and April 22. Meanwhile, total NFT sales have just surpassed $100 million. Brands such as Nike, Formula 1, Louis Vuitton and Samsung are also examples of big names investing in the trade of NFTs.

The pressure of digital transformation is not going anywhere and the banks need to continue working towards building the mobile and digital offerings that customer want here and now.

Finance

Euro zone ministers expect inflation to slow in 2022

The acceleration of euro zone inflation, driven energy prices, is mostly temporary. Then the price growth will slow down again. The euro zone finance ministers agreed that, that too the next year as forecasted by the European Central Bank and the European Commission.

Paschal Donohoe, chaired the talks of the ministers in Luxembourg. In a news conference he said that there was also agreement that the inflation spike was not an argument against the transition to renewable sources of energy. This is under the EU’s ambitious plan of reducing CO2 emissions to zero by the year 2050.

Continue Reading

Finance

Under new rules, borrowing for investment sensible

British finance minister Rishi Sunak said that the government borrowing to fund investment was a sensible thing. This is to allow under new fiscal rules that he is likely to announce, unlike borrowing for day-to-day spending. He said that borrowing for capital investment that is going to drive up their growth is probably a sensible thing for them. And that too particularly in an environment of slightly lower interest rate. Sunak stated this in an event on the sidelines of the annual conference of Britain’s ruling Conservative Party. This event was organized by the Taxpayers’ Alliance advocacy group. Sunak stated in that event, that borrowing for more day-to-day spending is probably less something that you would want to have as part of your framework.

Continue Reading

Finance

IMF board to interview Georgieva-sources

The International Monetary Fund’s executive board is going to interview Managing Director Kristalina Georgieva. This is regarding that; its reviews claims that she pressured World Bank staff to alter data to favor China in her previous role. Board members were initially expected to meet with Georgieva. But spent their time working on other regular business matters.

The board members spent hours for questioning lawyers from the WilmerHale firm. This is about their World Bank investigation report which alleged that Georgieva, as the bank‘s CEO applied undue pressure on staff, to alter data in the flagship “Doing Business” report to benefit China. Then, an IMF spokesperson said that the IMF board remains committed to a thorough, objective, and timely review of the matter. Georgieva has strongly denied the accusations.

The upcoming interviews could prove pivotal in either increasing support for Georgieva. This is with many IMF shareholders are keen to wrap up the board’s deliberations on the matter. The fund’s most influential member governments, including the top shareholder the United States, have withheld public judgment. The World Bank tasked WilmerHale with investigating the “Doing Business” data irregularities identified in 2020. The law firm’s report contends Georgieva. The former World Bank President Jim Yong Kim’s office pressured staff to manipulate data so that the China’s global ranking in the “Doing Business 2018” study of investment climates rose to 78th from 85th.

Continue Reading

Trending