UOB ventures into the metaverse, sees potential in blockchain technology

Over the past two years, companies around the world have begun to take an interest in the metaverse.

The term dates back to a sci-fi book from the 90s, where it describes a three-dimensional virtual reality that mirrors the real world. In theory, it’s a place for people to live an alternative life with all the conveniences of digital technology.

As it stands, our metaverses aren’t fully habitable yet. However, there have been a number of developments for this purpose. From retailers setting up metaverse stores to musicians hosting virtual concerts, we’re learning more and more about the online equivalent of real-life activities.

In November last year, UOB launched SkyArtVerse – a virtual art gallery built in Decentraland. Launched in 2020, Decentraland is one of the most popular metaverses today. It offers land packs that can be purchased using cryptocurrency and used to set up virtual environments.

Decentraland was selected for UOB’s first foray into this space as it has one of the largest user bases among the metaverses, in line with our goal of expanding our engagement with audiences through a differentiated virtual experience.

– Lilian Chong, Head of Group Brand and Corporate Social Responsibility, UOB

UOB’s move followed two months after DBS became the first Singaporean bank to venture into the metaverse – doing so in partnership with The Sandbox, a close Decentraland competitor.

UBS and AXA are also among this list of financial firms pursuing metaverse strategies in Singapore. It seems that the industry as a whole sees the potential in this new technology.

Looking at SkyArtVerse

SkyArtVerse showcases the winning works from UOB’s Painting of the Year competition. Viewers can enter the gallery using their own customizable avatars and then observe the artworks and learn more about the artists’ stories and inspirations.

“UOB has been a steadfast supporter of Southeast Asian art and artists for more than four decades,” explains Lilian Chong, UOB’s Head of Group Brand and Corporate Social Responsibility. For the banking institution, the metaverse offered a way to expand engagement with both artists and audiences.

With the launch of SkyArtVerse, UOB became the first bank in Asia to explore this intersection between art and technology.

In a survey from 2022, the company found eight out of 10 respondents agreed that understanding art improved one’s quality of life. A corresponding share also contributed to art’s ability to bring people from different walks of life together.

“The reach of the metaverse beyond physical boundaries allows us to bring an international community of art lovers together,” Chong explains. By using this technology, UOB aimed to emphasize the benefits that many attribute to art. It was a way to improve accessibility and allow Southeast Asian works to reach a global audience.

So far, the experiment appears to have been a success. “We are encouraged by the public’s response to the platform, with visitors spending an average of 15 minutes in the virtual art theme park to explore the winning artworks,” says Chong.

Is decentralization the way forward?

One of the main debates surrounding metaverse technology has been the need for decentralization. Companies like Meta and Microsoft have been pushing for centralized metaverses, while Decentraland and The Sandbox are leading the way on the other end.

As the next iteration of the internet takes shape, it remains to be seen whether both sides can coexist.

“Both centralized and decentralized metaverses have their advantages and disadvantages. We will continue to explore both types of platforms and assess their suitability for relevant projects,” says Chong. She cites governance and privacy among the factors important to consider when making such decisions.

Centralized platforms collect user data for a variety of purposes.

For example, social media apps can recommend more relevant content as they learn more about the user. This adds an aspect of convenience and can improve the overall experience. On the other hand, the data can also be misused or sold to third parties without consent.

Decentralized platforms offer an alternative solution, where users can access such apps without having to give up personal information. This guarantees privacy, but takes away the tailored experience.

As it stands, decentralized metaverses seem to have the upper edge over their counterparts. Meta’s Horizon World’s metaverse has been a notable source of the company’s financial woes, with the platform failing to meet its monthly active user target last year.

Meanwhile, Microsoft has cut back on its VR projects amid a wave of tech layoffs.

Crypto and the Metaverse

When their rise coincides, blockchain technology and the metaverse are often seen to go hand in hand.

For example, Decentraland and The Sandbox both use their own crypto-tokens to maintain a world economy. Users are identified solely by their crypto wallet addresses, which can be used to access the Platforms.

Such tools help steer crypto away from its notoriety as a speculative investment. Chong recognizes the inherent risks surrounding the asset class and the need for investors to have a thorough understanding of its complexities.

“That said, we continue to see the strong potential of underlying blockchain technology,” she says.

UOB is capitalizing on the growing interest in digital assets by exploring tools such as asset tokenization, central bank digital currencies (CBDCs) and the metaverse.

“We believe that blockchain technology and the metaverse are here to stay, and UOB will continue to capitalize [it] to offer appropriate financial services and engage customers in a safe and secure manner.”

Featured image credit: UOB