The metaverse has become a trend in the digital economy. It’s only been a couple of months since Facebook’s rebrand, but it’s already driven an avalanche of discussions about the metaverse concept as a whole. For starters, nearly everyone describes it as the metaverse — when the reality is that there is no singular metaverse in the sense that we talk about the internet. Services like Meta’s Horizon Worlds and Microsoft’s Mesh don’t interact with each other, they are just separate VR apps. But big corporations like Facebook, Microsoft, Epic and others keep announcing that they are going to create their own metaverses. There are many definitions regarding the term Metaverse. The word itself is derived from the Greek prefix. μετά- (between, after, through) and the word “universe” (world). Therefore, the Metaverse is a world between worlds.

The main difference between the Metaverse and all other fundamental digital creations is that it provides a tight connection among all of its structural components. The connection between them can be expressed in several ways, such us:

The metaverse establishes connections to the real physical world. One metaverse is meant to be linked with another metaverse, and/or with the real physical world. Judging solely by this criterion, the real metauniverses do not currently exist. There are only network-reliant projects with a large number of users. This includes online games, cryptocurrency projects, etc. But technically speaking they cannot be qualified as real metauniverses.

What is important to recognize is that the further development of metaverses (metauniverses) will significantly boost the growth and adoption of a wide variety of cryptocurrencies as an integral part of them.

What Types of Metauniverses are There?

Most likely, ad hoc metauniverses won’t see the light. Instead, they will likely combine several segments, such as segments of general entertainment, games, telecommute, communication, economic activities of companies, etc. All of them will require pseudo-anonymous digital payments at some point.

There is no doubt that as digital technology develops, the metaverse will eventually emerge in its fullness. And sooner or later, just like in the case of impending attempts of cryptocurrency regulations, government agencies will pay close attention to these digital entities too.

Therefore, the biggest question is whether the governments will be able to influence the end-point Metaverse and impose certain limitations and bans? We should bear in mind, that this is a highly competitive game, and the main function of a state apparatus is to define certain frameworks assuming prohibitions, restrictions, oversight and enforcement. All states are dealing with them, but only in different forms and depths. Accordingly, one can expect that regulators and authorities at some point will be keen to start interacting with the Metaverse.

But the very fact of administration of the Metaverse violates the interests of individuals. Nevertheless, such considerations as security of state institutions, judicial and environmental standards, will require certain measures to be adopted. A typical example is that the Metauniverses will be forced to comply with customer personal data disclosure standards. Nothing will stop the authorities from imposing penalties on the owners of the Metaverse and their administrators for possibly violating legislation in the field of personal data protection.

What Restrictions can Governments Impose on the Metaverse?

There is no doubt that one or other types of restrictions will be implemented sooner or later. What will they look like? So far, there are no clear guidelines, since, as we mentioned, there are no real metauniverses either. For example, they can set a time limit for being inside the Metaverse. For example, in China, there are already restrictions on the amount of time spent playing games for teens.

The Metaverse may be covered by the TC articles. For example, a company might prohibit overtime work. In addition, the authorities can impose restrictions on the authorization. Perhaps the users will be forced to disclose their identities. There will be requirements for the administrators of such structures, and there may be much more of them than for ordinary users.

It is likely that some sort of licenses granting the right to operate the Metauniverses will be introduced and the appropriate supervisory authorities will be empowered to issue them.

Is Complete Ban of the Metaverse Possible?

Just like in the cryptocurrency universe no one can exclude attempts to ban any or all the activities associated with Metaverse. However, all governments are unlikely to do it simultaneously, which means some countries will still enjoy access to it, while other ones do not. Just like in the case of similar events around Bitcoin, other cryptos and the very mining of them itself, that will create inequality prompting users to secure access elsewhere. So the brief answer is positive, meaning yes, such attempts will likely be undertaken. However, there is big doubt that they will succeed.

When Do We expect First Governmental Regulation in This Respect?

As soon as the Metaverse begins to gain popularity among tens of millions of users, they will create the first laws. As for the Metauniverses working with cryptocurrencies, the norms of the Civil Code, laws on information and personal data can already be used for them. Each state has rules that can be used now.

Will There Be Metauniverses Escaping Control by Authorities?

This cannot be ruled out. An analogy can be drawn here with the Darknet. Surely there will be such structures where there will be no regulation and control by state institutions.

What will happen to the personal data of the members of the Metaverse?

This legal issue will have to be resolved somehow. Nowadays, many structures use the personal data of clients, and they are in the public domain. They can be used by intruders by hacking into databases. It is obvious that the administrators of the Metaverse will have the personal data of users. And what kind of data? Perhaps they will even include the client’s mental profile, his avatar, behavioral patterns, and so on.

How they will protect them, how to use them – this question is not even considered yet. There are risks of leaks of personal data of participants in the Metaverse, since there is no effective protection of private information at the moment.

Bottom line

Above is the timeline of Bitcoin, crypto and blockchain development events since 2010. It seems like it was yesterday. After launching DeFi and NFT concepts, the crypto community – and all digitally aware citizens of the world – are now focused on the next step characterized by the sequential creation of the Metaverse. There is no doubt that the Metaverse will emerge one day. As soon as it appears and becomes functional, various government authorities will begin to develop corresponding restrictions and regulatory guidelines. What they will become, how licensing issues, dispute settlement in the Metaverse, rules of conduct, prohibition of illegal activities (after setting up definitions of legality), PPP (personal data protection) will have to be resolved. So far there are no clear answers yet. But there are a lot of questions!