Start Regulating the Metaverse Now, Researchers Tell French Leaders

A team of researchers commissioned by the French government said leaders should avoid previous mistakes made with the EU’s crypto rules when regulating the metaverse.

AccessTimeIconOct 24, 2022 at 7:02 p.m. UTC
Updated Oct 24, 2022 at 8:54 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

The European Union’s handling of its key crypto legislative packages highlighted an “inadequacy and lack of expertise” that should not be repeated when forming rules for the metaverse, according to researchers commissioned by the French government.

While the country should not be quick to dismiss the metaverse, a superset of virtual, augmented and physical reality, it should hasten to try and regulate it, the researchers said in a report published Monday.

The report, spread out over 116 pages and split into two parts, is the result of an exploratory mission into the metaverse, set in February 2022 by members of the French government, including the ministers for finance and culture. The document outlines opportunities and challenges the metaverse presents and how France should approach the advent of virtual worlds.

“Don't throw the metaverse baby out with the Facebook bathwater!” the researchers write in the report, pointing out that the conceptualization of virtual worlds predates Meta, the tech giant and aspiring metaverse builder formerly known as Facebook.

They warn that Silicon Valley’s “battle of perspectives” about whether the metaverse should, for instance, remain open to the general public or be limited to private groups, is indicative of what could happen should virtual worlds be rooted in “technologies plagued by isolating users from each other, and from the world around them.”

France defends an “open, free and secure internet” and this stance must also be reflected in the “diplomatic bodies and negotiation techniques on the future of communication technologies,” the researchers say.

The mission was led by Camille François, a researcher at Columbia University; Adrien Basdevant, a lawyer of the Paris Bar; and Rémi Ronfard, researcher at France’s National Institute for Research in Digital Science and Technology.

They called on lawmakers to “start now” on extending frameworks such as the European Union’s General Data Protection Regulation (GDPR) and the Digital Services Act (DSA) to cover data collection and user protection in the metaverse.

But they also warn against repeating blunders that marked the progression of the EU’s recently agreed-upon regulatory frameworks targeting crypto when setting up rules for the metaverse.

In their report, the researchers singled out the bumpy ride experienced by the draft Markets in Crypto Assets (MiCA) regulation – which was marked, for instance, by attempts to effectively ban energy-intensive crypto networks like Bitcoin in the bloc – and the overhaul of the Transfer of Funds (TFR) regulation, which sought to identify those who sent money from private digital wallets, as reasons why lawmakers should rely on experts to guide regulations.

“Otherwise the place will quickly be taken by industrial lobbies,” the report said.

The quotations have been translated from French.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.

Sandali Handagama

Sandali Handagama is CoinDesk's deputy managing editor for policy and regulations, EMEA. She does not own any crypto.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.