Keynote Address by Commissioner Caroline D. Pham at the EUROFI Financial Forum Prague 2022
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Metaverse and policy
There are key areas that need to be further developed and matured to achieve the full metaverse and its potential for engagement, community building, self-expression, and commerce. They include technology; commercial infrastructure; privacy and identity; workforce of the future; and regulation, tax, accounting, and social infrastructure.
As these areas are developed, one question in particular stands out: how do regulators address the development of solutions and services to support virtual worlds that are globally accessible, but may be required to adhere to local jurisdictional requirements and rules in commerce and payments? Luckily, this question is not a new one, as it is a further extension of how regulators have approached globalization and past technological innovations that enable cross-border activity.
Just as regulators have had to tackle the digitalization of finance, so too must we look ahead to the future and the increasing digitalization of life. In many ways, much of our life involves transactions. Some say that the foundational layers of the metaverse—the “enablers”—are security, privacy, and governance; identity; and payments and monetization. These are issues that are very familiar to financial regulators, financial institutions, and new entrants like fintechs. You could say that money is life.
Some of the other critical issues for policymakers to consider include open access to the metaverse; competition and promoting innovation; intellectual property rights; commerce, monetization and distribution models between stakeholders; promoting diversity, equity, and inclusion; securing user safety and awareness; and ensuring data privacy.
The metaverse also has broader societal implications. Relevant stakeholders will need to define a road map toward a metaverse that is ethical, safe, and inclusive. This likely will include rules relating to data privacy, security, ethics and regulatory compliance, physical health and safety, and equity and fairness.
Because metaverse development is still in its early stages, I believe a principles-based approach to emerging policy issues appropriately reflects the need to anticipate and adapt to issues and risks quickly. I also believe it is imperative for regulators to proactively engage with the private sector, and ensure the responsible development of products and services that have embedded protections.
Once metaverse traffic increased, regulation may come forward.