Recent Meta Policy Statement Outlines Goals, Hopes For Metaverse Regulator Activity – Fin Tech – United States – Mondaq
Meta released a position paper concerning its most recent thoughts about regulation in the metaverse on Dec. 2, 2022. Noting its ongoing work with the Metaverse Standards Forum (which Meta established in June 2022 and now has 1,800 organization members), the position paper reiterates Meta's position that interoperability and portability are ultimately key to the success of the metaverse.
While acknowledging that regulators and policymakers are giving considerable attention to the application of blockchain technology in the financial services industry (e.g., crypto exchanges), Meta stresses that “it is important to recognize that blockchain also has extensive non-financial applications that can be foundational to the metaverse economy,” namely non-financial, blockchain-based NFTs.
The policy statement goes on to make three major points to regulators and policymakers:
As to the first point, Meta emphasizes that many non-financial, blockchain-based assets (e.g., digital art) should be treated as they are in the physical world and, therefore, left largely unregulated. Meta goes on to suggest that consumer protection laws for the physical world may not be well-suited to blockchain-based digital goods. Instead, “blockchain analytics” may sufficiently protect consumers when, for example, a digital piece of art is sold. Meta emphasizes that regulators can support economic innovation and creativity through treatment that “does not discriminate” against technology and “does not impose undue requirements on individual creators.”
As to the second point, Meta hopes that regulators will bear in mind the features of a decentralized environment. Meta hopes that that regulators will focus on these principles and not rush to impose new rules. Meta recognizes that companies have a central role to play in developing effective and safe user experiences. But it also states that decentralization and use of blockchain-based assets can be used on a broad scale to promote easy portability of digital assets (eventually between different metaverses), with acceptance established broadly so that digital assets do not lose their value if their original associated environment fails.
This approach may have interesting interactions with the brand-new UCC Article 12, governing digital assets. Article 12 emphasizes control of the digital asset, as opposed to the physical possession associated with many traditional forms of collateral. Several states have already adopted Article 12.
Meta's third and final point emphasizes the need for cross-jurisdictional standards given that the metaverse will transcend state and national borders. Meta cautions against “onerous requirements for local storage of data” that pose challenges for cross-border applications, but encourages regulators and companies to collaborate to establish industry norms for proof of identity among metaverse users. Meta rightly points out that a unified approach to identity establishment and related privacy protection is critical to establishing safe, economically vibrant virtual environments.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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