To bring together financial regulators and the creative industries in defining regulations for the emerging metaverse, the Ministry of Japan (1) established a web3 policy office.
Intending to bring together various sectors responsible for industrial finance, corporate systems, and taxation, along with media-related industries such as sports, fashion, and other entertainment departments, the Ministry of Economy, Trade, and Industry (METI) of Japan (2) have created its very own web3 Policy Office in the Minister's Secretariat (3).
This initiative aims to strengthen the framework for analyzing the business environment while drafting web3 rules, which will lead to the establishment of a consulting body that will oversee web3 policies. The University of Tokyo (4) also announced its metaverse study program ranging from high school to adult learners, geared towards workforce learners.
The fact that Web3 is the primary resource for users, that nations like Japan, China (5), and the USA (6) are considering developing policies related to the technology, and that many are considering technological innovations like the metaverse, NFTs, and cryptocurrencies, has led to the understanding of governments worldwide recognizing the potential this technology holds.
The digitalization of government and a wider and better view of the future is driving governments worldwide to advance internet safety regulations. This key characteristic has been the main driver for modernizing and digitizing the global economy in the years to come.
It inspires digital infrastructure, aspirational digital activities, and the next generation of the web's technical, payment, and legal bodies to build the metaverse, the real-time virtual world. Although there are a few obstacles, the final product is undoubtedly encouraging, which is why major organizations saw its potential.
Multiple management bodies have adopted smart contracts, blockchain technology, distributed databases, and self-executing contracts based on computer code as solutions to the difficulties facing the mass public sector, from security to reward administration.
The NFTs and digital collectibles have highlighted the necessity of operating anti-money laundering legislation and ensuring user protection from fraud and bogus promotional activities in tandem with the development of the cryptocurrency industry.
Given the potential that web3 holds, distributed autonomous organizations (DAO) (7) regulated by smart contracts have been proposed as mitigation for passive supplies for the digital economy.
Spotify (8) provides the same service to musicians and artists as Apple (9), and Google (10) provide to game developers, cutting down on their earnings from game downloads by approximately 30%. While using a similar methodology, Uber (11), on the other hand, fails to pay its workers or employees what they are due in terms of compensation.
Advocacy organizations for Web3 believe these platforms should be reorganized as DAOs, where DAOs would issue crypto tokens giving developers, creators, and workers/employees a share in the platform's governance and economic platform rather than just servicing stakeholders.
Although it is still unclear what benefits DAOs would provide beyond financial gains or governance advantages for unionization and employee representation in the board directory, the government must take DAOs into account alongside other web3 policies due to the pervasive power imbalance in the contemporary digital economy.
The growing virtual economy
Although the idea of digital currency and NFTs have ideally changed how all sectors were regarded, particularly the gaming industry, which gave a significant boost with games like Fortnite (12), Call of Duty (13), Minecraft (14), and many others that enabled players with not only the play-to-earn concept but also play-to-move, play-to-own (15), and significant possibilities that unlocked NFTs and avatars that revolve through virtual lands along with real money value for the in-game inventory.
Although in-game skins and avatars made a greater economic contribution of $93 billion even before NFTs. However, there was a downside to these purchases: if the game's creator decided to kill or ban a player, everything they had bought, including the inventory, would be worthless and gone forever.
This conventional manner has typically been replaced by NFTs and metaverse, which enable users to store their in-game purchases in their digital wallets, sell them to other players, and use previously purchased skins and avatars across various compatible games. This suggests that as gaming popularity grows, the industry will develop more and positively impact the digital economy.
How does ownership work in Web3?
When we purchase a car or a piece of land, we must complete the necessary paperwork and register information so that the government can verify our ownership and grant it. Even though this process is very drawn out and the web3 ownership process is somewhat comparable.
The blockchain-based registry or underlying database loads the inventory and ownership history, which are directly recorded through digital transactions, providing a quicker method of registering property or assets.
This database is maintained by global computer networks connected by blockchain technology, ensuring safety and security through encryption rather than by the government. Without the need for additional paperwork, blockchain technology directly records every asset transfer, whether it is ownership of the real estate, personal property, or collectible transactions.
A statement or proof that the user is the legitimate owner can be found once it has been recorded in the blockchain ledger. Even renting digital assets or metaverse property for personal or business use is now feasible in the metaverse, which parallels real-world revenue production alongside virtual world revenue generation for similar activities.
The future potential that web3 and its decentralized nature offer has also been enabled and predicted thanks to NFTs' capacity for preserving the ownership and history of creators and owners as well as globally validating digital transactions.
With a technology that portends not only a bright and advanced future but also one that is secure and safe. Web3 will undoubtedly expand and connect digital boundaries, bringing balance and enabling limitless transactions and data flow. This will not only connect multiple sectors, including commercial, business, NGO, and even governments, but it will also open up numerous investment opportunities.
Governments throughout the world will benefit from blockchain technology and the advent of the web3 if they adopt and regulate it while it is still in its infancy to reap the greatest benefits and combine the digital revenue, which will eventually strengthen the nation's economy.