Leaked Metaverse Strategy of European Union Includes Regulatory Sandbox & Governance Structure

A recently leaked paper from the European Commission highlights how Metaverse would require a new kind of global governance in order to continue to stay open and lawful.

Popular crypto publication CoinDesk had access to the draft document that proposes relaxing regulations to boost innovation. Furthermore, the draft document notes that it wants to address the legal barriers to new forms of digital cooperation such as the decentralized autonomous organizations (DAOs).

Citing the benefits of education, healthcare, and culture, a version of the draft document talks about “Virtual worlds bring unprecedented opportunities in many societal areas. This technological shift also involves new forms of global governance.”

The document emphasizes the importance of international collaboration on various subjects like technological standards, identity management, censorship, and surveillance. It highlights the need to shape the future of the internet as an open and secure space that aligns with EU values and regulations.

Referring to the global bodies addressing today’s online world such as the Internet Corporation for Assigned Names and Numbers (ICANN), the document notes: “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.”

European Law Commission and Crypto

The European Law Commission has been seriously working around building frameworks and structures for the crypto industry. A week back, the UK Law Commission proposed the government develop laws governing cryptocurrencies and ensure that the UK becomes a global hub for digital assets and non-fungible tokens (NFTs).

By the end of 2023, the Commission said that it seeks to explore the potential of digital cooperation models. This typically includes the decentralized autonomous organizations (DAOs) that underpin novel financial applications. As a result, they would carry out a study to “identify legal, administrative, and economic barriers that prevent their uptake.”

According to the document, in the early part of next year, the promotion of “regulatory sandboxes” will be initiated to test short-term projects under a more relaxed regulatory framework. The paper also highlights concerns about the dominance of large “gatekeeper” companies that may hinder competition from smaller rivals, as well as the threat of counterfeit goods that can undermine brand integrity.