Interview about the SWISS METAVERSE ASSOCIATION's PAPER ON REGULATION (April 2024)

Dr Mattia L. Rattaggi and Dr Daniel Diemers wrote the position paper "Creating Certainty in the Metaverse" on behalf of the Swiss Metaverse Association (SMA), published on April 10, 2024 (see 'selected publications'). The office of the SMA We asked the co-authors six questions about the position paper and its development.

When did the idea of writing a position paper on the regulation of the metaverse first come up?

Mattia: The idea that regulatory aspects are fundamental to the development of a healthy Swiss metaverse ecosystem was already embedded in the design of the association, with the establishment of a working group on “Regulation, Tax, and Legal Policy”. Ongoing discussions between Daniel and myself led to the realisation that regulatory aspects were important, as they were discussed not only in my dedicated working group, but also intensely in other groups, such as “Arts and Culture”, “Insurance, Banking, and Payments”, or “Consumer, Retail, Fashion, and Luxury”. It then logically followed that a position paper on regulatory issues was a priority.

Daniel: It is no secret that with the Swiss Metaverse Association we follow from a method point of view the successful blueprint of the Swiss Blockchain Federation. I remember four to five years ago it was the key to success to engage politicians and policy makers in Bern as well as in key cantons. To start that dialogue, we are convinced a first, rather high-level position paper is the right instrument. That is also why we translated it in four languages: Italian, French, German, and English.

Did you come across any information that surprised you while writing the position paper?

Mattia: One aspect that surprised us was the fact that Switzerland seems to be lagging on an international scale when it comes to raise and address governmental and regulatory aspects connected to the metaverse. While a
liberal approach is certainly the most appropriate in this field, and the government should continue to have a subsidiary role, we should also learn from the past, and deserve to the metaverse a similar governmental treatment
to the one dedicated to the emergence of DLT technologies – a subsidiary but pro-active approach that has allowed Switzerland to become a centre of excellence for DLT technologies and their applications, giving life to a thriving and sustainable industry.

What challenges did you face during the writing process?

Daniel: Managing the complexity of the topic. The metaverse is indeed a broad and complex development, both at the technical, business and social/ human level.

Mattia: Indeed: It synthetises existing and emerging digital technologies such as cloud computing, quantum, VR/AR, artificial intelligence, blockchain, and grants 24/7 accessibility from anywhere, through increasingly sophisticated technological devices. The metaverse brings about large, interactive, virtual spaces where persons can work, play, relax, transact and socialise. It is multi-dimensional and involves areas that to some extents have been or are in the process to be regulated (for example AI). The challenge is therefore to understand and achieve recognition that the metaverse, being synthetic of different intertwined sectors, requires a holistic regulatory treatment.

Daniel: Great point, Mattia. Yes, and while we were cruising at 50.000 feet this happened: We were discussing our approach with Swiss and international experts in the field and noticed that there are strong emotions and “semantic battles” going on. Some people prefer calling the metaverse rather spatial computing, virtual worlds, virtual reality, synthetic spaces, cyberspace, etc. At the same time, some prefer to include the metaverse in Web3 or insist on the opposite: That metaverse and Web3 are entirely different things. Honestly, Mattia and I discussed this intensively, and we agreed that in this debate, there’s no right or wrong. So, we keep sticking to metaverse as the term, which in the end is a label for a deeper, underlying process, the emergence of immersive virtual worlds, which probably started in the 1990’ies and, today, is not finished
yet.

What are your key takeaways from the paper?

Mattia: It is our view that - together with Swiss policy makers - we can jointly create an emerging, smart, pragmatic, principles-based legal and regulatory framework for the metaverse, that establishes Switzerland as one of the emerging, globally leading places to “do business” around the metaverse. Calling a dedicated “Metaverse Taskforce’’ at the Federal executive level, just as it was done with the topic of Blockchain, will help in setting a clear strategy and initial regulatory framework, and in emphasising the complex and interdependent nature of the metaverse – deserving a holistic and coordinated approach over and above the regulatory treatment of constituting parts such as AI.

Daniel: Absolutely, and while doing so, we feel that we are definitely pushing the boundaries of politicians and policy makers. It is undisputed that as of today, there are many other topics that seem more important and urgent at first sight. But we would like to propagate a more strategic view into the future and anticipate what will be important to all of us – in Switzerland and in the world – in five or maybe ten years. Only by being ahead of the current, daily discourse, we can guarantee that Switzerland stays a step ahead and remains a top destination for the world’s best talents, businesses, and startups, who will contribute to our natural drive to innovate and push the envelope.

Why do you consider this position paper to be of such importance for Switzerland?

The adoption of metaverse in business, government, and social activities is ineluctable. Its emergence is just the latest step in the (exponential) digitalisation of our lives. Believing that it will go away or that it is just a
temporary fashion, is fundamentally misleading. It follows that the paper is important because in a way it ”rocks the boat” at the right moment, hopefully triggering a discussion and interest around the questions of whether there are immediate and specific issues to be addressed, how big is the urgency, how do we avoid over- or under-regulation, especially compared to others, are we too early to work on this, or too late already.

In which direction will the metaverse develop over the next five years?

The adoption of metaverse is ineluctable and will be steady. Yet it would be wrong to expect a revolution. The metaverse will develop alongside existing physical social and economic activities, adding a new digital layer to our lives. It is a technological development, and our civilisation is driven by technological progress. This process cannot be stopped without affecting social progress itself, but it should be framed pro-actively, to ensure that social benefits are maximised.