The lack of education and understanding of immersive technologies will be among the key challenges facing policy-makers in South Africa and the rest of the continent, in developing regulations that will govern the metaverse.
This is the sentiment shared by ICT industry pundits, discussing the approach, guidelines and key considerations policy-makers have to grapple with, in developing a framework for the uncharted territory of the metaverse, as boundaries between the physical and virtual worlds continue to blur.
Dubbed the next evolution of social connection, a “metaverse” is a virtual reality (VR) space where users in different parts of the globe can interact with each other and with virtual beings in a computer-generated environment.
There are already over 160 companies globally building their metaverse universes – where they host 3D office spaces, shops, produce resources, rent virtual services and develop games or service offerings for clients, according to Forbes.
Experts believe while the metaverse is expected to unlock infinite business opportunities and revenue streams, it also presents challenges for regulators in areas such as personal data privacy, non-fungible tokens (NFTs) and crypto transactions, and cyber security issues, among others.
Mic Mann, co-founder and CEO of Africa’s first metaverse, Africarare, points out it is still early days, as multiple metaverses are still being formed on the continent.
However, he notes, Africa must dive into this space “head first” so that when regulations are formed, the continent can have a voice in and play a leading role in the formulation of the legal framework.
“Lack of education and understanding of the space is a challenge − more education, research and understanding is needed regarding Web 3, crypto-currencies, blockchain and the metaverse, so that policy-makers can make informed decisions,” says Mann.
“More support is needed from African governments and the private sector. A regulatory framework would require an entirely new paradigm and fresh approach to thinking, with full understanding of how decentralised crypto and Web 3 works, so that the metaverse can reach its full potential in Africa.”
With further support and more role-players, Africa can have better chances of regulatory guidelines that will be favourable for the continent, he adds.
Globally, tech firms such as Microsoft, Meta (formerly Facebook), Google, Qualcomm, Nvidia, Shopify ad Roblox have invested millions of dollars in the creation of their metaverses.
The ongoing metaverse and NFT hype is increasingly drawing the interest of South African companies. In March, MTN and advertising and marketing consultancy M&C Saatchi Abel became the first local firms to buy virtual real estate in Africarare.
The companies entered Africarare as village owners, and will open offices and offer their products and services in the metaverse.
Developed by Johannesburg-based innovation company Mann Made, Africarare is a 3D VR immersive hub.
According to the SA Social Media Landscape 2022 report, 16% of almost 30 000 surveyed South Africans are already exploring the metaverse.
Discussing the research findings during a webinar last week, World Wide Worx CEO Arthur Goldstuck briefly touched on how SA’s government is anticipated to approach the regulation of the metaverse.
“The metaverse will not be regulated as such in South Africa, but rather the various entities that make it up will be subject to the same regulations governing online content and interaction,” he asserted.
In terms of guidelines that South African policy-makers should take into consideration when introducing laws to govern the metaverse, Mann points out that government must keep in mind the importance of open innovation, so that entrepreneurs can build agile operations in these metaverses.
“New business models and innovation must be factored into any regulatory laws. This space works differently to traditional business and holds incredible potential for growth, upliftment, participation and wealth generation if regulated correctly.”
Learning from global regulators
Janice Mulligan, US-based attorney and founder of law firm Mulligan Law, recently addressed delegates during a hybrid Lexverse Conference hosted by Lexing Network, an international network of tech lawyers, in partnership with legal firm Michalsons.
According to Mulligan, the US is exploring three different options in regulating the metaverse.
“The metaverse in the US will be regulated in three ways, or perhaps a combination of three ways. These are through: government regulations and laws, through the courts or self-regulation.
“The US has lots of laws, but none of these were created for the metaverse and we may need additional laws to accommodate the metaverse.”
But these laws may be long time in coming, she noted, as the US has a track record of being very slow and taking a “wait and see attitude” before creating a body of federal laws to regulate a new area.
In terms of the implementation aspect of the new laws, she added that regulation of the metaverse will likely take place through smart contracts, which automate operations and transactions, and through crypto tokens, which carry the financial value of crypto-currency.
“Technology solutions are an efficient way to regulate the metaverse. Smart contracts and crypto tokens could be a potential tool to be used in regulating the metaverse. Licensing and trademarking of virtual goods could also be another way to regulate the metaverse.
“But even if these metaverse laws are created, it’s going to be hard to enforce them, and corporate governance will have to play a big role in self-governance,” she warned.
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