A leaked draft document from the European Union (EU) reveals plans to establish a system of governance to harness the potential of virtual worlds.
The leaked paper acknowledges the unprecedented opportunities presented by virtual worlds, citing their potential benefits in healthcare, education, and culture. It also recognizes the need for new forms of global governance, including decentralized autonomous organizations (DAOs) based on cryptocurrency technology. The EU intends to engage in international discussions on topics such as technological standards, identity management, censorship, and surveillance to shape the next generation of the internet as an open, secure, and EU-compliant space.
In early 2024, the European Commission plans to create “regulatory sandboxes” to test out projects and address concerns about dominant companies stifling competition. Additionally, the Commission aims to establish a multi-stakeholder governance process to address aspects of virtual worlds and the evolving web4 that fall beyond the scope of existing internet governance institutions, such as the Internet Corporation for Assigned Names and Numbers (ICANN).
Web4 represents the seamless integration of the physical and virtual worlds, with companies like Meta (formerly Facebook) and Apple making significant investments in this space. The fortunes of cryptocurrencies have become intertwined with the concept of the metaverse, as traders and investors speculate on the cryptocurrencies that could underpin the digital economy or create artificial scarcity within virtual worlds. While venture capital funding in this sector has experienced a decline since 2020, recent months have seen a resurgence, signaling a positive momentum and investment opportunities.
Looking ahead, several experts anticipate that many challenges currently facing the metaverse will be resolved within the next seven years. Advancements in hardware, such as Apple’s upcoming augmented reality headset, are expected to drive the growth of applications in this space.
As the concept of virtual worlds gains traction and cryptocurrencies continue to be closely associated with the metaverse, the EU express the need for global governance. Its proactive approach in shaping the future of the internet and addressing emerging challenges reflects the growing importance of virtual worlds in various societal domains. However, the evolution of this technology and its impact on our lives raises important questions about privacy, security, and the balance of power.