The Metaverse market is currently worth 68 billion USD.
Many people also view the development of the metaverse as the natural evolution of the Internet from Web 2.0 to Web 3.0. For context, Web 1.0 is described by many as the first stage of Internet evolution, whereby users primarily consumed content. In Web 2.0 , users also interact with the Internet to create and share content. Web 3.0 gradual removal of intermediaries and decentralization, giving users tremendous control over their experience on the Internet.
A new information and financial operating system is here.
Today, in metaverse believers are out in force, setting up digital wallets and crypto buying digital properties, building businesses, leasing virtual lands, and creating fashion and technology districts, among others.
A store on metaverse becomes an asset that belongs to you (the investor), personally, or via a corporation that you are running. And since all the transactions are virtual, anonymous, and encrypted, then no tax, vat, or government authority can come in armed with the ability to audit this business.
Metanomics is the evolution of what we know as the digital economy. In the “physical economy” trading happens with the exchange of physical assets in person, which is furthered by the digital economy where physical assets are traded but through digital platforms. In metanomics, consumers use digital platforms to trade non-physical digital assets.
Facebook, predicting the metaverse as the next wave in technology, has gone so far as incorporating the term into its new name, Meta
Metaverse entities have already started to set up base in the UAE including names such RFOX and others.
Buying and selling on the metaverse
The metaverse concept works the same as that of the internet or social media platforms. The metaverse is also where payments are made in cryptocurrencies as opposed to fiat currency.
Law in the metaverse
Much of the application of existing laws, as well as potential creation of new laws, in the metaverse remains unknown.
Regulation of virtual assets
Virtual assets in the metaverse, such as NFTs ( non-fungible token ), may be subject to traditional financial regulatory regimes. The manner in which some blockchain-based assets are developed and sold might render them “investment contracts” and, thus, subject to securities laws. Application of securities laws would trigger a complex set of regulations on sales, trading and other activities.
Creation and promotion of other digital assets, vetting is necessary as to the content and advertising of an NFT prior to creating or offering them in the UAE. There might be Third party approval requirement from Ministry of Culture and Youth in relations to marketing of NFT
The metaverse will undoubtedly use cryptocurrencies and tokens, which may be subject to these regulatory regimes. Still the appropriate laws to cryptocurrencies and tokens are still under development globally.
NFTs – An emerging asset class facilitating creation of New Economy in Digital World
NFT is a digital asset, based on computer code and recorded on a blockchain ledger to prove ownership and authenticity of a unique asset in the decentralised finance (DeFi) space.
Open Marketplace – Similar to OpenSea and Rarible, where anyone can mint2 and sell NFTs. On these marketplaces, there is no need to apply and get accepted – creators just connect to a wallet and mint the NFTs. Existing owners of NFTs can list their NFTs for resale.
Curated Marketplaces – Similar to SuperRare, KnownOrigin, Nifty Gateway MakersPlace where the platform determines which NFTs are allowed to be minted, posted and sold on directly its marketplace.
Proprietary Marketplaces - Similar to Top Shot, Bored Ape Yacht Club proprietary marketplaces, which only mint their own items, creators on other marketplaces retain the rights to the IP underlying their NFTs. This is because marketplaces that permit minting on their platforms are merely facilitating the creation of the NFT, but are not developing the actual artwork. Another distinguishing aspect of proprietary marketplaces is that some offer their own online “Showcases” where users can display their collection of the marketplaces’ NFTs
The Dubai Virtual Asset Regulatory Authority will provide a full range of VA [virtual asset] services in co-ordination with the Central Bank of the UAE and the Securities and Commodities Authority
The law defines the activities, subject to VARA authorisation, as follows:
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