Recent Meta Policy Statement Outlines Goals, Hopes for Metaverse Regulator Activity | Holland & Knight LLP

Meta launched a place paper regarding its most up-to-date ideas about regulation within the metaverse on Dec. 2, 2022. Noting its ongoing work with the Metaverse Requirements Discussion board (which Meta established in June 2022 and now has 1,800 group members), the place paper reiterates Meta’s place that interoperability and portability are in the end key to the success of the metaverse.

Whereas acknowledging that regulators and policymakers are giving appreciable consideration to the applying of blockchain know-how within the monetary providers trade (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,” specifically non-financial, blockchain-based NFTs.

The coverage assertion goes on to make three main factors to regulators and policymakers:

undertake a technology-neutral strategy that focuses on “same risks, same rules”
acknowledge that decentralized programs have a task to play in unlocking new financial alternatives by fostering innovation, competitors, interoperability and portability of possession and identification
embrace better collaboration between the general public sector and trade as a important basis for any future regulatory frameworks

As to the primary level, Meta emphasizes that many non-financial, blockchain-based belongings (e.g., digital artwork) must be handled as they’re within the bodily world and, due to this fact, left largely unregulated. Meta goes on to counsel that shopper safety legal guidelines for the bodily world might not be well-suited to blockchain-based digital items. As a substitute, “blockchain analytics” might sufficiently shield customers when, for instance, a digital piece of artwork is bought. Meta emphasizes that regulators can help financial innovation and creativity via therapy that “does not discriminate” in opposition to know-how and “does not impose undue requirements on individual creators.”

As to the second level, Meta hopes that regulators will keep in mind the options of a decentralized setting. Meta hopes that that regulators will give attention to these rules and never rush to impose new guidelines. Meta acknowledges that corporations have a central function to play in creating efficient and secure consumer experiences. But it surely additionally states that decentralization and use of blockchain-based belongings can be utilized on a broad scale to advertise straightforward portability of digital belongings (ultimately between totally different metaverses), with acceptance established broadly in order that digital belongings don’t lose their worth if their authentic related setting fails.

This strategy might have fascinating interactions with the brand-new UCC Article 12, governing digital belongings. Article 12 emphasizes management of the digital asset, versus the bodily possession related to many conventional types of collateral. A number of states have already adopted Article 12.

Meta’s third and ultimate level emphasizes the necessity for cross-jurisdictional requirements provided that the metaverse will transcend state and nationwide borders. Meta cautions in opposition to “onerous requirements for local storage of data” that pose challenges for cross-border purposes, however encourages regulators and firms to collaborate to ascertain trade norms for proof of identification amongst metaverse customers. Meta rightly factors out {that a} unified strategy to identification institution and associated privateness safety is important to establishing secure, economically vibrant digital environments.