The Swiss Metaverse Association publishes the first Swiss position paper on regulation in the metaverse. The association responds to societal and entrepreneurial needs for regulation in the young sub-sector of Web 3.0.
Founded in February 2023, the Swiss Metaverse Association operates as a public-private partnership in the fields of economy, administration, science and society. It connects relevant stakeholders and promotes the economic and social integration of metaverse-based applications and activities in Switzerland. In its opinion paper "Creating Certainty in the Metaverse", the co-authors Dr. Mattia L. Rattaggi, Head of the Working Group "Regulatory, Tax and Legal Policy", and Dr. Daniel Diemers, Member of the Board, propose a clear framework for policy makers and regulators.
The emergence of the metaverse and its implications for society
The past two years have seen significant advances in Web 3.0, artificial intelligence, and virtual reality. Numerous innovations have made these fields accessible to the general public, making them more tangible and easier to understand. The Metaverse has also benefited from these developments, regaining prominence in the public eye. According to a report by McKinsey & Co, the potential value of the Metaverse for business and commercial purposes is estimated to be around five billion USD by 2030.
"The Metaverse is becoming an integral part of our digital and physical lives, and Switzerland should take a leading role in creating a clear legal framework that promotes innovation while protecting individuals and businesses." - Dr. Daniel Diemers, Board Member of the Swiss Metaverse Association
The Metaverse is accessible 24/7 through electronic devices and interacts closely with other technologies such as cloud computing, blockchain or artificial intelligence. Clear rules for dealing with the complex issues surrounding the Metaverse are urgently needed. However, due to the complexity of the issue, the authors do not advocate comprehensive regulation of the Metaverse, but rather the establishment of a clear framework.
The association provides the basis for regulatory certainty
As generally accepted norms of the Swiss legal system, the authors mention the digitization of law. This includes clarifying the basis for legal recognition and enforcement of digital interactions, including issues of data ownership and tokens. Questions of legal application and jurisdiction in an international context are also crucial. Other important principles for legal and regulatory requirements include issues such as sustainability, inclusiveness, responsibility, pragmatism, oversight, and comprehensiveness.
The authors then outline areas of application where the Metaverse could have strong transformative effects and where future regulation is needed. Private activities, communities, and leisure applications, where most practical use cases of the Metaverse have emerged, are at the forefront. Significant growth is also expected in business applications and the public sector, where several use cases already exist for the general public. Education and training is also being discussed as another application area where significant benefits are expected from the new technology.
Regulatory focus areas over the next three to five years
Significant regulatory focus areas are likely to be addressed in the next three to five years. These include digital interactions, privacy, labor, and intellectual property, among others. The authors have provided an incomplete list of focus areas that would need to be prioritized and addressed to establish a strong legal and regulatory framework for the metaverse.
According to the Swiss Metaverse Association, Swiss policymakers should focus on four points in light of the inevitable emergence of the Metaverse:
- Given the irreversible emergence of the Metaverse, Swiss policymakers should closely monitor developments and establish capacities at the federal level to set policy and to implement and enforce regulations.
- An intelligent, principle-based legal and regulatory framework for the Metaverse in Switzerland must be established to position the country as one of the emerging, globally leading locations for Metaverse-related businesses.
- In order to make digital interactions legally binding and thus effectively enforceable, the fundamentals of the digitization of law must be addressed.
- The convening of a "Metaverse Task Force" at the federal level should help to establish a clear strategy and a first regulatory framework. Relevant associations - such as the Swiss Metaverse Association and the Swiss Blockchain Federation - as well as academia and affected industries will ideally be represented in the task force in order to keep pace with the rapid developments.
