EU’s Leaked Metaverse Strategy Proposes Regulatory Sandbox, New Global Governance

Virtual worlds will need international engagement to stay open and secure, a leaked European Commission strategy paper said.

AccessTimeIconJul 6, 2023 at 10:25 a.m. UTC
Updated Jul 6, 2023 at 10:26 a.m. UTC

The metaverse requires a new kind of global governance to stay open and lawful, according to a leaked European Commission paper.

The draft document, seen by CoinDesk, also proposes relaxing regulations to aid innovation, and says it wants to look at the legal barriers to new forms of digital cooperation like decentralized autonomous organizations (DAOs).

“Virtual worlds bring unprecedented opportunities in many societal areas,” said the document, a version of which is due to be published next week, citing benefits for healthcare, education and culture. “This technological shift also involves new forms of global governance.”

International engagement on topics such as technological standards, identity management, censorship and surveillance is needed to ensure the next generation of the internet “is shaped as an open, secure space, respectful of EU values and rules,” the document said.

“The Commission will support the creation of a technical multi-stakeholder governance process to address essential aspects of virtual worlds and Web4 that are beyond the remit of existing internet governance institutions,” the document said, likely referring to the global bodies that underpin today’s online world such as the Internet Corporation for Assigned Names and Numbers (ICANN).

The commission said it wants by the end of this year to explore the potential of new digital cooperation models, such as decentralized autonomous organizations, which underpin many novel financial applications – and will carry out a study to “identify legal, administrative and economic barriers that prevent their uptake.”

Early next year it will promote “regulatory sandboxes” to test out short-term projects under a lighter regime, the document said. The paper also warns of the risk of large “gatekeeper” companies blocking out competition from rivals, and counterfeit goods undermining brands.

The document was promised by Commission President Ursula von der Leyen in September of last year, and officials have said they want the metaverse to preserve EU values such as privacy and fundamental rights. A spokesperson for the commission did not immediately respond to a request for comment.

Edited by Sandali Handagama.


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Jack Schickler

Jack Schickler was a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.