As we enter the age of the metaverse, major technology companies are leading the way in creating immersive virtual ecosystems. However, this advancement has raised concerns within the European Union (EU) regulatory bodies, who fear the potential for a monopoly that could disadvantage smaller firms and overlook European values.
A leaked draft document has shed light on the EU Commission’s proactive stance on this issue. The document, expected to be released on July 11, emphasizes the importance of tailored regulations for innovative technologies in order to secure a positive future for the metaverse. It states, “Virtual worlds bring unprecedented opportunities in many societal areas. This technological shift also involves new forms of global governance.”
The draft document, seen by Coindesk, provides a comprehensive guide to the EU’s intentions, highlighting the need for changes in existing legal frameworks to accommodate the metaverse. It advocates for the establishment of new entities similar to decentralized autonomous organizations (DAOs) that would oversee metaverse activities.
The EU Commission focuses on key areas such as health, education, and culture within the metaverse. Its vision is for a community-driven “web4” that prioritizes interoperability at all levels. The document stresses the importance of upholding EU values and rules to create an open and secure space on the internet. It encourages international collaboration on technology standards, identity management, and censorship to achieve this goal.
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To address essential aspects of virtual worlds and the web4 that fall outside the scope of existing internet governance institutions, the document proposes the creation of a technical multi-stakeholder governance process. This process would ensure that the metaverse aligns with EU values and regulations while involving various stakeholders.
The EU has been at the forefront of regulating digital assets, setting an example for other jurisdictions. The Markets in Crypto Assets Regulation (MiCA) is a prime example of their leadership in this field. This draft legislation aims to regulate cryptocurrencies, stablecoins, and digital asset exchanges, and it has been praised as a landmark in industry regulation. In contrast, executives in the United States continue to call for clearer regulatory guidelines.
With this new metaverse document, the EU aims to strike a balance between users, corporations, and regulators. It emphasizes user freedom and interoperability while maintaining strict standards for data privacy, protection, and gender-based laws. Additionally, the EU plans to establish “sandboxes” to test smaller projects under its rules and introduce a Virtual World Toolbox in the first quarter of 2024.
For companies, the strategy suggests the creation of specialized web3 hubs focused on gaming, virtual reality, and related technologies. The EU also encourages partnerships with major companies to facilitate the development of a metaverse roadmap across the jurisdiction.
One of the challenges in the metaverse is the emergence of enclosed “walled garden” networks as the sector expands. In response to this concern, the EU has committed to working with companies to promote an open web 4.0. This proactive approach demonstrates the EU’s commitment to ensuring that the metaverse aligns with their core values, even as it evolves.
In conclusion, the EU’s regulatory bodies have recognized the need for tailored regulations to govern the metaverse. They are taking a proactive stance, advocating for changes in existing legal frameworks to accommodate this technological shift. The EU aims to strike a balance between user freedom and corporate interests while upholding its values and rules. With its focus on interoperability, data privacy, and international collaboration, the EU is positioning itself as a leader in metaverse regulation.
