TALKING
‘‘ business
The concept of the metaverse represents a multitude of opportunities across the digital economy , from NFTs to cryptocurrency to avatars . For some , experiencing a virtual world can feel like an exciting step into a new type of reality . But with the metaverse allowing more of us to embrace a limitless future , there have been concerns about the challenges that this new world presents – both to individuals and businesses .
While the promise of the metaverse is incredibly exciting , real-world controls are needed to protect users from abuse , fraud and loss . Implementing such regulatory oversight is difficult both from a political and practical perspective and can be tricky to apply globally . That said , builders of the metaverse can take precautions by creating their own ‘ metacode ’ set of conduct . To make the metaverse truly viable , it ’ s important for regulators and architects of these spaces to work on how to ensure the safety of its users .
Of course , we also must consider traditional risks like fraud . There is little visibility on what cybercriminals are doing to exploit the metaverse and it is already
clear that real-world security problems like hacking and identity theft are happening in the virtual world .
Nick Aronson , VP , Capital Markets , APAC , FIS
Regulation often lags behind technological innovation , which means there is currently a lack of reliable supervision over the metaverse .
Transactional risks in the metaverse
Regulation often lags behind technological innovation , which means there is currently a lack of reliable supervision over the metaverse ( which , some would argue , is the whole point !). It is important to remember that regulation in the virtual world should be thought of as something that seeks to protect participants to foster innovation and growth .
This leads to another significant risk which should not be overlooked – the possible damage to our mental health . Theoretically , if the metaverse operates like the real world but is unencumbered by criminal law and combined with extreme virtual experiences , users are potentially exposed to situations that can trigger negative emotions .
Currencies exchanged in virtual worlds , for example , are not real money in the traditional sense . Most are either in the form of cryptocurrencies or ingame currencies and while they may be stored in virtual wallets or accounts , they are not protected by regulators or operators against loss or fraud .
The value of what we purchase or sell in the metaverse is also less tangible in the real world . There are no tangible forms of consumer protections , meaning that while a piece of virtual real estate or a Non-Fungible Token ( NFT ) may have a statable value , there is no right to refund or adhere to regulations and its value is only held in that particular space .
The question is : will regulation mitigate any of these risks ?
Regulatory possibilities and practicalities
With over 500 companies working on the metaverse , it ’ s evident that more companies are jumping onboard the virtual ship every day . In theory these individual operators could indefinitely exist outside the regulatory framework and little can stop an offshore-based investment vehicle from running its own section of the metaverse and allowing people access to it from other virtual worlds .
www . intelligentcio . com INTELLIGENTCIO APAC 37