EU stays on top of Web3 with metaverse, AI and crypto strategies
The European Union has been vocal about its place in the rapidly expanding ecosystem of emerging technologies.
It has been a leader in establishing clear crypto regulations with its long-awaited Markets in Crypto-Assets (MiCA) framework signed into law in late May. The EU has also been pushing forward on creating regulations for the development and deployment of artificial intelligence (AI) systems.
Most recently, on July 11, the European Commission released its latest plan to take the lead in metaverse development and prevent Big Tech from becoming too dominant in an economically viable sector.
A European vision of the metaverse
The latest EU proposal estimated that the global market size for metaverse developments will exceed 800 billion euro by 2030, compared with its end-of-year value of 27 billion in 2022. McKinsey’s latest report on the state of the metaverse even has an estimated value of $5 trillion in the same timeframe.
According to the commission’s initiative, it wants to get ahead on metaverse development to reflect EU values and fundamental rights, along with a push for openness and interoperability.
Margrethe Vestager, the vice president of the European Commission, said the EU needs to have “people at the center” in order to shape it according to its principles.
“We want to make sure Web 4.0 becomes an open, secure, trustworthy, fair and inclusive digital environment for all.”
The commission held European Citizens’ Panels in February and April of 2023, which focused on the metaverse. It aimed to formulate suggestions for a “vision, principles, and actions” that ensure EU-based virtual worlds are fair.
According to the commission, 140 EU citizens were randomly selected for participation, which resulted in 23 recommendations that guided the strategy.
Integrating digital and real worlds is no longer science fiction.
Early this year, 140 European citizens put forward 23 recommendations to guide the development of human-centric, secure and trusted virtual worlds.
See how they helped shape our new strategy on virtual worlds ↓
— European Commission (@EU_Commission) July 11, 2023
The current pillars that the EU has decided on for its metaverse strategy include empowerment and reinforcing skills to create a pool of specialists in the field of virtual worlds, supporting an EU Web4 on a business level, supporting societal progress and virtual public services, and shaping standards for open and interoperable virtual worlds.
But wait, what is Web4?
The European Commission’s tweet about its pillars for virtual worlds and Web4 strategy garnered a mixed response from users, with many asking what Web4 means, and other’s joking about developing Web5 and Web6 already.
According to the strategy, Web4 is distinguished from Web3 by integration with the real world. The commission’s statement recognizes that Web3 is still “currently developing,” with its main features being openness, decentralization and user empowerment.
“The next generation, Web 4.0, will allow an integration between digital and real objects and environments, and enhanced interactions between humans and machines.”
For the EU, Web4 could look like the introduction of smart cities with the right underlying infrastructure in place.
It is already investing in initiatives such as Destination Earth (DestinE) and Local Digital Twins for smart communities, as well as the European Digital Twin of the Ocean, which is said to allow researchers to advance science for the development of precision applications and help public authorities to make informed public-policy decisions on related issues.
Related: Animoca still bullish on blockchain games, awaits license for metaverse fund
The commission also included “advanced artificial and ambient intelligence, the internet of things, trusted blockchain transactions, virtual worlds and XR capabilities, digital and real objects and environments” as full integrations in Web4 that will set it apart from Web3.
It claims this will enable a “truly intuitive, immersive experience, seamlessly blending the physical and digital worlds.”
On July 5, the European Blockchain Sandbox, which is part of its smart cities initiative, unveiled its first 20 use cases.
EU regulations in place
At the moment, Vestager said there are no current metaverse regulations drafted. However, she expects various other rules already in place to affect it, such as privacy, market power and forthcoming AI regulations.
As previously mentioned, the EU has recently signed its groundbreaking MiCA regulations into law, which became one of the world’s first comprehensive sets of rules to regulate the crypto industry.
On July 12, the European Securities and Markets Authority announced that it plans to release three consultative papers on its MiCA standards for crypto asset service providers while it fulfills its mandate under MiCA regulations.
There are already questions regarding the regulations’ policies on stablecoins and the exclusion of decentralized finance in the published regulations.
In addition to its recently published crypto legislation, the EU has been working on regulations that will affect the AI industry. On June 14, the European Parliament passed the EU AI Act, which would force tools like ChatGPT to disclose all AI-generated content and other measures against illegal content.
The race against big tech
All of these initiatives with virtual worlds and regulations for emerging technologies come as Big Tech companies like Meta Platforms, Microsoft, Apple and Google work on their own versions of the metaverse and AI tools.
The EU clearly stated in its metaverse strategy that virtual worlds will not be “dominated by a few big players” and should be “driven by open technologies.”
Meta, the parent company of Facebook, was openly committed to developing its own metaverse world accessible through its virtual reality headsets. However, by the end of 2022, the company lost billions due to its metaverse division.
In 2022, Microsoft announced a $69 billion acquisition of Activision Blizzard, one of the gaming industry’s key players.
Most recently, Apple dropped its latest version of its virtual reality goggles, the Vision Pro. However, instead of positioning them for use in the metaverse, it chose to use the wording “spatial computing.”
Magazine: Experts want to give AI human ‘souls’ so they don’t kill us all
In what he said would be his last remarks as CFTC chair, Rostin Behnam said he intended to advocate for the commission to address regulatory challenges over digital assets.
A Tory bid to launch a new national inquiry into the grooming gangs scandal has been voted down by MPs amid criticism of “political game playing”.
MPs rejected the amendment to the Children’s Wellbeing Bill by 364 to 111, a majority of 253.
However, even if the Commons had supported the measure, it wouldn’t have actually forced the government to open the desired inquiry, due to parliamentary procedure.
Instead, it would have killed the government’s legislation, the aim of which is to reform things like the children’s care system and raise educational standards in schools.
Follow politics latest: Reaction to vote
Tonight’s vote was largely symbolic – aimed at putting pressure on Labour following days of headlines after comments by Elon Musk brought grooming gangs back into the spotlight.
The world’s richest man has hit out at Sir Keir Starmer and safeguarding minister Jess Phillips, after she rejected a new national inquiry into child sexual exploitation in Oldham, saying this should be done at a local level instead.
The Tories also previously said an Oldham inquiry should be done locally and in 2015 commissioned a seven-year national inquiry into child sex abuse, led by Professor Alexis Jay, which looked at grooming gangs.
However, they didn’t implement any of its recommendations while in office – and Sir Keir has vowed to do so instead of launching a fresh investigation into the subject.
Jess Phillips exclusive:
Victims can have inquiry if they want one
The division list showed no Labour MPs voted in favour of the Conservative amendment.
Those who backed the proposal include all of Reform’s five MPs and 101 Tory MPs – though some senior figures, including former prime minister Rishi Sunak and former home secretaries James Cleverly and Suella Braverman, were recorded as not voting.
The Liberal Democrats abstained.
Speaking to Sophy Ridge on the Politics Hub before the vote, education minister Stephen Morgan condemned “political game playing”.
“What we’re seeing from the Conservatives is a wrecking amendment which would basically allow this bill not to go any further,” he said.
“That’s political game playing and not what I think victims want. Victims want to see meaningful change.”
As well as the Jay review, a number of local inquiries were also carried out, including in Telford and Rotherham.
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Grooming gangs: What happened?
Speaking earlier in the day at PMQs, Sir Keir Starmer accused Conservative leader Kemi Badenoch of “jumping on the bandwagon” after Mr Musk’s intervention and spreading “lies and misinformation”.
Referring to her time in government as children’s and equalities minister, the prime minister said: “I can’t recall her once raising this issue in the House, once calling for a national inquiry.”
He also said having spoken to victims of grooming gangs this morning, “they were clear they want action now, not the delay of a further inquiry”.
Ms Badenoch has argued that the public will start to “worry about a cover-up” if the prime minister resists calls for a national inquiry, and said no one has yet “joined up the dots” on grooming.
Girls as young as 11 were groomed and raped across a number of towns in England – including Oldham, Rochdale, Rotherham and Telford – over a decade ago in a national scandal that was exposed in 2013.
There is a critical need for a comprehensive, responsible AI approach to address privacy, security, bias and accountability challenges in the emerging agentic economy.
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